Charlotte Apartment Building Boom and How It's a Rerun of the 70s

[Jordan T.]

There was an awesome article in the Charlotte Observer (see the link below) about the current building boom in Charlotte and how it compares to the last massive building period in the early 1970's - including a discussion of some of the complexes that were built then and how they look today.

http://www.charlotteobserver.com/news/local/articl...

Takeaways:

- Trendy apartments go out of fashion, and will offer frequent opportunities for renovation.

- Despite falling from a class A  to class C level of community, the rent growth over the past 45 years in these complexes was 3% per year on average.

- Today's B and C class apartment complexes generally started as class A apartments decades ago - that's where the best returns are for developers.

- Unit mix is important - having most or all 1 bedroom units limits the customer base and increases turnover.

- Real estate is forgiving - as long as you keep vacancy down and don't let deferred maintenance pile up, the properties will do OK.  Though the best returns obviously come from keeping the unit conditions fresh and modern.