When it comes to smart markets to invest in, it’s no secret that we like the Sun Belt, in particular the Charlotte MSA and the Carolinas as a whole. Lucern has been investing in this region for over five years and in that time, we’ve seen our strategies validated. This is evident by continued wage […]
When it comes to smart markets to invest in, it’s no secret that we like the Sun Belt, in particular the Charlotte MSA and the Carolinas as a whole. Lucern has been investing in this region for over five years and in that time, we’ve seen our strategies validated. This is evident by continued wage and job growth, migration trends and ample runway for future rent growth compared to other major metros in addition to a favorable business and tax environment to name a few.
When Lucern did our initial deep dive into the data surrounding the region, the available assets, the local economy, and the cultural conditions, we saw a long runway. The data continues to paint a picture that leads to insights about great conditions for multi-family real estate investors.
Although we could probably list fifty reasons, here are ten reasons why Lucern continues to pursue opportunities in and around Charlotte:
A Great Wallet Ratio
Charlotte is 90th on the cost-of-living list of the top 268 most populated cities in the country, which at first glance may not impress an investor. However, Charlotte is also #6 in highest median income, #17 in average home cost, and #18 in average apartment rent; it is this mix of rankings that creates the foundation for a strong investment market that can sustain rent growth.
Healthy Supply & Demand
The median rent price is up 13% since January 2021, growing significantly faster than during pre-pandemic years. A big reason is vacant apartments in Charlotte are becoming increasingly scarce. While rents are up 13%, the local vacancy rate has fallen to less than 5%. As more households compete for fewer apartments, historically low vacancy rates allow property managers to be highly selective and raise prices
Homebase for Big Business
Known for its financial services and distribution, Charlotte is home to 12 Fortune 500 companies and 15 Fortune 1000 companies. Including Bank of America, Lowe’s and Duke Energy to name a few. There are also plans of 2 more Fortune 500 companies to be headquartered in Charlotte by 2025.
Consistent Population Growth
Charlotte draws in close to 100,000 new people every year, making it the largest metropolitan area between Atlanta and Washington, D.C. With a projected 23.7% increase in population from 2014-2025, the area will soon hold a total of 2.8 million people.
Graduates Need Jobs & Apartments
Charlotte’s growing local universities align well with the rental market and large corporations hiring by the thousands. There are 9 colleges in Charlotte and 30 colleges within 50 miles enrolling a total of 112,938 students.
One of the few southeastern cities with extensive public transit, such as the Lynx Light Rail and access to a great international airport. Charlotte offers a lot of flexibility to both suburbanites traveling to the city to work and executives flying in or out of the city.
Northwest & Northeast Charlotte
The northwest is appealing to those interested in outdoor activities such as whitewater rafting, hiking, and camping. The northwest also has a newly constructed $600 million dollar casino. The northeast has the newly developed Blue Line Light Rail Extension that provides alternative transportation for those in the area. The area also includes UNC Charlotte and IBM Innovation Center. Lucern believes these two areas to be the sweet spots in the region.
All Major Sports
Charlotte currently has five (soon to be six) professional sports teams competing almost year round
Charlotte offers a four-season climate without a brutal winter or summer making it even more attractive to higher income northeasterners coming from NYC, PHL, and DC.
Proof of Concept
The Lucern Charlotte portfolio, past and present, continues to exceed expectations. To date, Lucern has yielded above forecasted returns on almost 500 units between several properties. Most recently we exited Charlotte’s Nevin Place Apartments for a 34% IRR for our LPs at a 1.88 multiple.
The current market conditions in Charlotte combined with Lucern’s ability to quickly execute on target properties and create valuable cap rate increases, solidifies a strong investment formula. As with all markets we monitor and invest in, we stay close to the data to continuously validate our decisions, however for the foreseeable future Charlotte has a big greenlight from the analysts at Lucern.
Contact us to learn more about upcoming opportunities.
About Lucern Capital Partners
Lucern Capital Partners is a real estate investment firm that targets value-add multifamily and mixed-use assets along the U.S. East Coast with a focus on the Carolinas. With over 55-years of combined real estate experience, the Lucern Capital Partners team has successfully transacted on over $2.5 billion of debt and equity real estate transactions during their careers. They bring that knowledge to accredited investors to provide income-generating investments in institutional-quality multifamily and mixed-use assets through fund vehicles and standalone transactions.