News

Ryan Carver, licensed architect and entrepreneur with more than 25 years of experience in the city of Charlotte, has been closely monitoring the dynamic trends within both the U.S. and Queen City markets. Ryan is sharing his insights on recruiting top talent and highlights how your firm can grow despite challenges in the multifamily labor market:

The Queen City, better known as Charlotte, NC, ranks as the second-largest banking hub in the US (Forbes). This city and the Sunbelt Region are continuing to expand and develop. In light of the evolving market outlook, it is important to understand the trends that have fueled Charlotte’s exponential development over the last several years. With the influx of new businesses and an increase in jobs, there is a lot of opportunity for further development growth, despite looming headwinds. Understanding the Queen City’s market outlook and how to navigate the headwinds is essential to comprehending its success. By gaining insights into current trends and emerging markets, you can prepare for active development. Whether you are a commercial developer, a long-term resident of Charlotte, or simply want to better understand trends that may be happening in your city, this article will provide essential insights into the market outlook.

The market outlook for Charlotte remains optimistic despite mounting inhibiting factors due to macro-economic and geopolitical issues. In light of the current economic climate, projects are taking longer to become fully realized. Developers in the market are struggling to find reasonable rates when borrowing money, while potential sites are expensive and face more scrutiny. Additionally, we are seeing more quality over quantity in the realm of development, meaning that for every 10 deals that come across an owner’s desk, maybe 5 get underwritten and only 1 gets developed. In today’s world, it’s a numbers game. Finding (affordable) money, elective incentive programs, and project timing have never been more important.

In the face of challenges concerning due diligence and timing, a significant number of people continue to migrate to the Queen City and its adjacent markets. Why the Queen City? The secret is out! Charlotte has many qualities that attract people looking to escape their expensive cost of living, avoid inclement seasonal weather, find job security, and/or a better lifestyle. Ongoing developments are fueling both rent and job growth, sustaining steady market expansion in the face of housing shortages.

Charlotte offers an exceptional quality of life with its vibrant culture, thriving small business scene, and abundant opportunities for stakeholders. With more than 800,000 people living in the area, and many young professionals are moving to the city to start their careers (The Charlotte Observer). The city’s infrastructure is also supporting this newfound growth, with transportation to and from the city offering citizens and visitors easy access to different neighborhoods. There are also many Fortune 500 companies headquartered here, like Bank of America and Lowe’s Home Improvement.

While this is good news, there is still an undersupply of housing, emphasizing the need for more inventory. There is currently relatively low confidence in the short- to mid-term with regards to the economy as a whole. However, once developers figure out how to do business in this new climate, things should be back on track. With more people entering this market daily, we need to stay ahead of the demand; more jobs mean the need for more apartments. Increased investment in housing construction and development is needed to ensure the city and its surrounding areas can keep up with the ever-growing demand for housing. The growth of Charlotte, North Carolina, has been meteoric, with potential for even more growth soon. Job availability, population increases, and more businesses setting up shop in the city are all signs of a healthy economy. Taking all factors into account, 2023 has adhered more closely to the typical seasonal trends.

Within the context of the last few years, especially considering the COVID-19 pandemic’s impact, the third quarter was fairly positive for multifamily. On the construction side, the backlog of work already in the pipeline will not be slowing until at least 2025, according to our General Contractor partners with whom we are currently working throughout the region. Additionally, we are facing a hawkish Federal Reserve interest rate policy to fight inflation (Norada). These ramifications will be felt throughout the economy. With a “correction” looming banks are facing additional scrutiny on lending, and money is expensive. Bottom line: things will slow until developers figure out how to do business with higher interest rates and more expensive capital.

However, despite the slowdown, there is still a shortage of housing as new residents and businesses move to the city. This underscores the need for more housing inventory. The demand for housing is continually growing, so it’s important to stay ahead of the curve and build more apartments to meet this competitive demand (Norada). Similar to the rest of the Sunbelt Region, increased investment in housing construction and development is essential for Charlotte and the surrounding areas to keep up with increasing demand. The market outlook for Charlotte is still very promising mid-to-long-term, and with the right investments, exponential growth possibilities remain endless.

Although there are challenges ahead, the 2023 annual performance metrics were better than originally predicted. There has been a material improvement in apartment demand in this same period. Rent growth, while tepid, at least remained in positive territory (ALN). Despite the third quarter’s upside, serious instabilities remain for the multifamily industry in the coming months. Similarly, although national average occupancy did decline slightly, the third quarter was the third straight quarter in which the decline in average occupancy diminished relative to the prior period.

With so many new opportunities, residents, and developments, Charlotte, NC, is taking initiative as a metropolitan environment that is meeting the threats of inflation head-on. The multifamily market continues to expand, with new businesses and housing developments emerging throughout the city. As a result, the city is becoming exceedingly attractive, as it provides a vibrant and prospering economy and way of life. This has, in many ways, minimized the impact relative to the rest of the nation. The influx of people and businesses causes Charlotte to become increasingly competitive as it sets an example for other cities in terms of economic growth and development. The trends unfolding in Charlotte’s multifamily market provide us with optimism and anticipation for the future.

For further inquiries or to learn more about SGA|NW, a GF design company’s multifamily design services, please contact Ryan Carver, managing director of multifamily at SGA|NW, a GF design company, at [email protected] or Danielle Barr, senior marketing manager at GF, at [email protected]. 

Ryan Carver, licensed architect and entrepreneur with more than 25 years of experience in the city of Charlotte, has been closely monitoring the dynamic trends within both the U.S. and Queen City markets. Ryan is sharing his insights on recruiting top talent and highlights how your firm can grow despite challenges in the multifamily labor market:

Over the past 15 years, single-family rentals (SFR) have proven to offer promising returns through their exponential demand and growth. Changing migratory patterns and a desire for more flexible housing options have led many investors to adjust their investment strategies to include this form of housing, often referred to as build-to-rent homes (BTR). SFR/BTR homes offer attractive returns with minimal risk, and properties provide investors with a steady stream of rental income. As these properties are typically leased on long-term leases, they are less susceptible to market fluctuations, and as the cost of buying a single-family home continues to rise, SFR/BTR homes provide an affordable option for many investors. As the sector continues to grow, it is important to understand why these properties are rising in popularity, the challenges associated with them, and the problems that they solve.  

In recent news, BTR has been labeled the “new normal” on the housing market. These unique homes offer numerous advantages to both landlords and tenants, including more control over the rental agreement and the ability to customize the residence to their own preferences. Additionally, investors can take advantage of the long-term cash flow potential associated with SFR and BTR homes, as well as the potential to benefit from an appreciating asset. Due to high mortgage rates and a limited supply of for-sale inventory for home purchases, prospects are compelled to consider the BTR market, and the statistics showcase this pattern. BTR capitalizes on a product with low-cost material and lower skilled labor compared to other construction types. It is only natural that people are seeking an approachable price point for a better way of life and a return on their investment, especially among the millennial population. Therefore, BTR properties offer numerous attractive qualities that are being valued.  

Today, the biggest challenge to BFR is a trend in the commercial real estate and multifamily market that is slowing down building due to high borrowing costs. SFR and BTR cap rates are also being impacted by the current economy. Regarding single-family rental pricing, institutional investors have decreased capital investments for the SFR sector beginning in the third quarter of 2022. Rising interest rates and concerns about declines in property prices have prompted some recalibration among SFR investors. Despite these trends, there is still investor demand in the sector, with abundant capital on the sidelines. In general, cap rates have risen 125 basis points over the past year, where rising interest rates and declining rent growth have had the largest impact. Nationally, cap rates, which were in the low to mid-4’s, are now in the mid to high-5 percent range, trading slightly below conventional apartment yields. The impact of rising interest rates on cap rates could be mitigated, should we be near the peak rate for the year, showing its continued growth.  

CEO of Kinloch Partners, Bruce McNeilage, who owns and operates four BTR communities in the Southeast, recently commented on this problem, expressing that owner-operators are to raise rents to remain profitable. He mentioned, “If there were five more projects in Nashville or in Greenville, South Carolina, they’d all be filled,”, giving context to geographical areas that would greatly benefit from BTR communities (CNN). Not only would various economies, small businesses, and tertiary markets in the U.S. benefit from BTR, but it would also be one step closer to solving the current housing crisis.  

BTR presents a plethora of growth opportunities, solving longstanding issues throughout our country. Pockets of neighborhoods outside big cities would thrive from the addition of these developments while meeting buyer priorities. The build-to-rent segment of the marketplace is better positioned than the SFR market because operators have better control over costs and execution. Housing starts have lessened due to higher interest rates, which have lessened the buyer pool for housing. As compensation, these developers have turned to BTR investors to sell their pipelines and build BTR communities for them. In summary, the single-family rental and built-to-rent markets appear to be on a growth trajectory of new heights. 

For further inquiries or to learn more about SGA|NW, a GF design company’s multifamily design services, please contact Ryan Carver, managing director of multifamily at SGA|NW, a GF design company, at [email protected] or Danielle Barr, senior marketing manager at GF, at [email protected]. 

GF Participates in Cycling Event to Raise Funds for MUSC Cancer Center

SGA|NW, a GF design company, a Carolina-based architecture and landscape architecture firm, will participate in the LOWVELO cycling fundraiser to support cancer research for the MUSC Hollings Cancer Center on Saturday, November 4th, in South Carolina. Our involvement in this event stems from SGA|NW’s strong commitment to making a meaningful impact on our community and advancing the battle against cancer. LOWVELO’s mission perfectly aligns with our values, as it seeks to raise funds for innovative cancer research at the MUSC Hollings Cancer Center, promote a healthier lifestyle, and celebrate cancer survivors. Each dollar we raise directly contributes to vital research efforts, bringing us closer to finding a cure.  

Leading this initiative is Bill Eubanks, our Director of Planning and Landscape Architecture, who is passionate about making a difference in our community and helping to find a cure for cancer. Additionally, our CEO, Keith Johnston, will be representing our firm and leading this cause by traveling through the Lowcountry. Each dollar we raise directly contributes to vital research efforts, bringing us closer to finding a cure.

Ten of our team members will be cycling 20 miles through the Lowcountry in the Carolinas to support the cause alongside additional organizations, companies, and community members. To follow, MUSC Cancer Center will be hosting a Lunch and Learn at the company’s Charleston office to educate the staff about cancer research, prevention, and treatment. SGA|NW, a GF design company, is dedicated to supporting the Lowcountry community and giving back to those in need.

In addition to our participation in LOWVELO’s event, our teams are raising funds for the vital research that the MUSC Hollings Cancer Center conducts to save and change lives.

To learn more about our team and our commitment to making a difference, visit our team page at https://fundraise.musc.edu/team/526725 . SGA|NW, a GF design company, specializes in architecture, interior design, land planning, and landscape architecture, taking a holistic and balanced approach to shaping the natural and built environment. We are proud to be supported by GF, an Atlanta-based firm that provides fully integrated architecture, engineering, planning, and development services. Join us in our mission to support cancer research and create a healthier future for all.

Ryan Carver, licensed architect and entrepreneur with more than 25 years of experience in the city of Charlotte, has been closely monitoring the dynamic trends within both the U.S. and Queen City markets. Ryan is sharing his insights on recruiting top talent and highlights how your firm can grow despite challenges in the multifamily labor market:

Today, the architectural, engineering, and construction industries face a unique challenge when it comes to hiring skilled labor. In the fall of 2023, the multifamily industry is struggling to meet its need for talented employees, with more positions than there are available candidates. 

The landscape of hiring has changed over the years, especially since 2008, when we experienced “The Great Recession.” When the recession hit the United States, the multifamily industry lost an entire generation of architects. In response to uncertain times, architects shifted to hiring contract employees to minimize risk and cost while completing work without overextending their permanent workforce. This was a new approach within the industry, but it allowed for a type of flexibility for firms to hire on an “as needed” basis. The silver lining was that firms could tailor their project teams to the client, project, or talent needed at any given time. The contractor-style practice continued for almost 10 years and continues to be relevant in some cases. Due to the loss of an entire generation of architects, our industry is still struggling to fill certain roles, especially when seeking more experienced professionals to build teams around. This occurrence has translated into a vast shortage of skilled labor, and the statistics speak for themselves. Two million workers left the construction industry in search of other careers (ABC). As it relates to the construction industry, countless contractors struggled to find skilled labor for complex projects; the industry’s workforce was an issue. 

In recent years, employee standards and expectations for work have shifted to prioritize competitive compensation, benefits, engagement, and the flexibility to work remotely. Companies are facing challenges when it comes to attracting and retaining talent in the context of these new standards.   Understandably, employers are working hard to meet these evolving expectations and, consequently, many businesses feel the impact of these changes. When it comes to recruitment strategies, employers are now seeking specific skillsets and actively considering candidates regardless of their current employment status. This includes prioritizing software proficiency in areas like Revit, diverse project exposure, and a variety of valuable “soft skills,” all of which streamline the vetting process.  

To survive in this competitive market, employers must make important decisions about the future of their firm and the employees they bring aboard to remain successful. Our company has set itself apart in the industry through a comprehensive and thoughtful approach to the recruitment process. We prioritize skillset and character traits over resumes, taking a holistic approach to evaluate each candidate. This approach is reflected in our multifamily interview screening, social meetups with our team, and various networking opportunities for prospective hires. We place strong emphasis on promoting our values from within and investing in our team members, ensuring that each employee feels valued, challenged, and essential to the firm. We also provide unique opportunities to attract top talents, establish our presence in emerging markets, and create office environments that are functional and enjoyable 

Overall, the multifamily industry is facing numerous employment challenges. Implementing the essential protocols and precautions required for success is a significant step toward the architectural industry landscape. Small firm operations vary from large firm affairs, and macro-issues like economics, war, supply chain issues, and more play a role in the stability of hiring in the multifamily industry. Employers must take steps to address these challenges if they want to remain competitive in the industry and successfully retain and attract top talent. 

  

For further inquiries or to learn more about SGA|NW, a GF design company’s multifamily design services, please contact Ryan Carver, managing director of multifamily at SGA|NW, a GF design company, at [email protected] or Danielle Barr, senior marketing manager at GF, at [email protected]. 

With more than 25 years of experience as a licensed architect and entrepreneur in Charlotte, Ryan Carver has been closely monitoring the dynamic trends within both the U.S. and Queen City markets. Delving into market issues and developments, Ryan offers his insights on supply chain and skilled labor issues in the multifamily construction industry: 

The pandemic has affected us in various ways, from a new perspective on world health to the evolving workplace and, prominently, the transformation of the multifamily market. This is because the private sector’s volatility is closely tied to factors like economic stability, stock market performance, macroeconomic conditions, interest rates, inflation, and more. Even today, we continue to grapple with the aftermath of pandemic-related supply chain disruptions and construction backlogs on a global scale.  

Since the beginning of the pandemic in 2020, many construction projects have faced these challenges. In some cases, developers have struggled to make deals “pencil.” Common construction materials that were previously readily available before the pandemic have become more expensive and, at times difficult to find, which often results in extending lead times. We’ve all heard the expression, “time is money.” As a result, contractors must consider material substitutions to maintain project budgets and schedules, supplying materials locally or sourcing them from multiple manufacturers to meet timelines. As an industry, we have still not regained the availability of products like there was prior to the pandemic. 

Contractors are also struggling to stay within their project budgets due to increased project costs (materials, schedules, labor, and insurance). Material cost escalations exceeded budgets. One way to limit this impact is to collaborate with engineers and architects during the design phase of a project to avoid selecting materials that are not readily available to them when it is time to jump into action. Maintaining communication and relationships with suppliers is also crucial to supplying the necessary materials to be on schedule.  

Scheduling is the backbone of any project. This includes material lead times, coordinating disciplines, and labor. Current material-lead times play a significant role in causing project delays. Start dates and phases typically aligned with material deliveries may need to be scheduled later to coincide with material deliveries due to their delay. In other words, being on track and aware of potential delays will allow contractors to stay ahead of the curve. Utilizing software systems provides contractors with the ability to track material deliveries, material inventories, fuel surcharges, and automatic reordering of materials.   

Research shows that supply chain management is at the center of manufacturing business success. To achieve business goals and create profitable operations, a supply chain strategy needs visibility, reliability, and predictability. The outlook for the next few years will be challenging for the construction industry, with the short supply of skilled labor, material delays, and rising costs directly affecting project schedules and budgets. Navigating these realities starts with understanding what they are and the areas of business they impact, collaborating with ownership and the design team to identify and execute alternative plans, and exploring options for training on critical skills. In terms of approach, the importance of remaining flexible even after the construction begins cannot be stressed enough; this relies on an experienced team, high accountability and everyone working towards the same clearly established goals. With the right planning and forethought, it is possible to mitigate the impact of these issues.   

About Ryan Carver: Ryan Carver, Managing Director of SGA|NW, a GF design company, is a licensed architect with more than 25 years of experience in the multifamily industry. Many of these years have been spent consulting in private development, creating client relationships, managing design teams, offering advice on marketing trends & business, as well as mentoring team members. With an entrepreneurial spirit and design-build origins, Ryan Carver was the winner of the Traveling Fellowship Award and serves on the ULI Affordable Housing Committee. He received his Bachelor of Architecture from the University of North Carolina at Charlotte and is AIA, CDT, and NCARB certified.    

  

For further inquiries or to learn more about SGA|NW, a GF design company’s multifamily design services, please contact Ryan Carver, managing director of multifamily at SGA|NW, a GF design company, at [email protected] or Danielle Barr, senior marketing manager at GF, at [email protected].