Ripken Experience in Myrtle Beach expands

Sun News - Check the stat sheet for The Ripken Experience-Myrtle Beach this year, and there's one number general manager Bobby Holland just doesn't like to see.  One hundred thirty. That's the number of teams of 13-year-olds and older that couldn't play in one of the complex's tournaments because there weren't enough fields.  That's about to change.  Work to add a third field for players ages 13 and older - the complex's eighth field overall - started this week. That $1 million investment will allow between 100 and 140 more teams the chance to play at The Ripken Experience next year, Holland said.

"It is going to have a tremendous impact on business," he said, walking through what will become the diamond's infield. "We had just been having to turn teams away. We just couldn't get them in because we only had two fields [for that age group]."  Business at The Ripken Experience, a partnership between Hall of Famer Cal Ripken Jr. and Burroughs & Chapin Co. Inc., has been brisk since the 50-acre complex opened off Mr. Joe White Avenue in Myrtle Beach in 2006, Holland said. Teams from across the country and overseas come to compete in tournaments on the AstroTurf fields and learn lessons of the game infused into the program by the Hall of Famer. 

Like other tourism businesses along the Grand Strand, The Ripken Experience had a solid summer. More than 400 teams played during the 10 weeks of summer tournaments, with business up 26 percent from summer 2009, Holland said. Players came from as far away as Canada and Kuwait, he said. Some of the tournaments for next summer already are sold out.  The complex is a component in the Grand Strand's push to increase sports tourism, with the Ripken name luring visitors who might never have come to Myrtle Beach otherwise but are likely to return once they see what the area offers, said Brad Dean, president of the Myrtle Beach Area Chamber of Commerce.

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Horry County envisions aviation mecca; Myrtle Beach International to see $1.7mil facelift

Sun News - "Building 325" might sound mysterious, like a structure you'd find at Nevada's Area 51.  But it's actually just a vacant hangar at the Myrtle Beach International Airport that is getting a lot of attention these days.  It might even be getting a new tenant.  Building 325 dates back to the military air base days.  It needs renovation so it can become home to new aeronautics-related industry, said airport spokeswoman Lauren Morris.  With 400 acres open at and around the airport, a planned technology and aerospace park, aviation businesses like Avcraft expanding, and industry giant Boeing locating not far away, Horry County is poised to become an aviation mecca, said County Council Chairwoman Liz Gilland.

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Wonder Works coming to Myrtle Beach

CBL - Wonder Works, an amusement park for the mind that will combine education and entertainment, is coming to Broadway at the Beach in Myrtle Beach, at the site of the former Crab House Reastaurant.  The venue will offer more than 100 hands-on exhibits, with opportunities to lie on a bed of 3,500 nails, be blown away by 74 mph winds, ride a 360-degree virtual roller coaster, manuever the controls of a NASA spacecraft to land the Shuttle, pilot a figher jet, play virtual sports and lazar-tag and participate in numerous other adventures.

At 97 feet in height and 50,000 square feet, with the appearance of being upside down, the WonderWorks construction will include 145 tons of rebar, 315 tons of structural steel, 2,100 cubic yards of concrete, 47 artificial updide down window boxes and 8 artificial palm trees.  Already operational on site are a Zipline that takes participants 1,000 feet between towers, 50 feet above the water, and a pirate-themed ropes course that stands 40 feet tall, spans three levels and includes 33 different challenge elements with more than 3,000 ropes and cables.

The Broadway and the Beach venue will be the fourth WonderWorks.  The others are in Orlando and Pananama City Beach, Fla., and Pigeon Forge, Tenn.  The hands-on amusement park is the brainchild of attorney and developer John B. Morgan, who lives in Florida, and Robin L. Turner, who resides in Tennessee and has a background in special event and fair/attraction management.  In 1997, the two men co-founded Attraction Concepts, Ltd., which opened the first WonderWorks attraction in Orlando in 1998.

WonderWorks, which is scheduled to open in March 2011, will offer group and combo packages to fit various groups and budgets.

Local developer rescues Gateway development in Wilmington

Star News - The local businessman is breathing life into an otherwise foundering development at the base of the Cape Fear Memorial Bridge.  A federal judge ruled this week the sale of the Gateway property to Pickett could move forward.  River 2 Sea LLC, the company that owns the land intended for the 11-story development in downtown Wilmington, filed Chapter 7 bankruptcy in August, less than an hour before the land was scheduled to be sold at auction.  River 2 Sea had already entered into a contract to sell the land to Pickett but trouble with financing got in the way of the $8.4 million sale.  Now Pickett has secured a $98 million construction loan from a consortium of hedge funds, he said.  “He’s found a new lender. That’s the challenge, to find a lender in these difficult times,” River 2 Sea owner John Evans said.

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Oak Island builders weigh impacts of sewer service / fees

Star News - New building projects in Oak Island will be subject to higher sewer tap and impact fees now that the town council has approved a 50 percent increase at the town staff’s recommendation.  Local builders say the new wastewater system is providing more opportunities but some headaches, as well.  The council voted unanimously last week to approve the new fees, which town officials say are needed to pay for the ever-increasing cost of the wastewater system and to tie the fees to actual tap costs and usage.

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Housing Market in the Carolinas

Housing Intelligence - With the surge in distressed real estate sales over the past couple of years, new homes have made up a smaller portion of overall housing activity. Based on data from Housing IntelligencePro, the proportion of new home sales declined to 9.5% of total home sales in the third quarter of this year compared to 10.5% during the same period a year ago. However, there were some areas across the country that did experience an increase in new home activity. Our data feature of the week focuses on places with the largest share of new home sales as a portion of the overall market, with a minimum of 1,000 closings during the quarter. The results show that the Carolinas stick out. Fayetteville, NC had the highest number of new home sales as a percentage of the overall market. Over 32% of all the homes closed in the third quarter were in the new homes segment which is up about 31% during the third quarter of last year. The fourth and ninth highest concentrated markets, Huntsville, AL and Charlotte, NC, both also experienced an increase in new home activity compared to year-ago levels. Ten out of the top-17 areas across the U.S. with the highest concentration of new home sales activity were in the Carolinas.

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Multifamily Sector Posts Record Occupancy Gains

Multifamily Executive - The multifamily real estate sector posted its greatest quarterly occupancy gain in the third quarter and is poised to continue to benefit from single-family housing market decompression throughout 2011, commercial real estate economists said this week in separate forecasts delivered by New York City-based REIS and Washington, D.C.-based Jones Lang LaSalle. While anemic GDP growth continues to hamper improvements to the unemployment picture, jobs are being added, and optimism of broader economic recovery is giving renters—particularly in the Gen Y millennial demographic—the confidence to double-down out of roommate and live-at-home situations.

“National vacancy levels fell by 70 basis points from 7.8 percent to 7.1 percent,” said REIS director of research Dr. Victor Calanog. “This is one of the sharpest drops in vacancy on record, and pent-up demand from renters [opting out of] living with their families or other roommates seems to be driving these results.” According to REIS, the third quarter also saw record net absorption of 94,000 units, with 90 percent of absorption coming from existing buildings leasing empty units.

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New Oak Island bridge opening delayed again

Star News - The opening of the new Oak Island bridge has been delayed yet again, an N.C. Department of Transportation official said Tuesday.  No official date has been set for the opening of the $36.6 million bridge over the Intracoastal Waterway, but it is now not anticipated until the first or second week in November, said Mark Blalock, assistant resident engineer in the NCDOT Wilmington office.  The estimate had been by the end of October for the last few months.  Construction crews lost a week of work because of the heavy rains and flooding in late September, Blalock said.  Workers must still complete the pavement markings, guard rails and a few other tasks, he said.  Blalock said it is looking more likely that only one lane in either direction will be opened to traffic at first while construction is completed.  Should the bridge open in mid-November, it will be nearly 11 months behind schedule. 

Inlet Square Mall Owner Announces Increase in Leasing

RAIT Financial Trust is pleased to announce that, since taking control of Inlet Square in Murrells Inlet, South Carolina in September of 2009, seven new leases in excess of 20% of the property, or approximately 90,000 square feet, have been signed. As a result of these leases, the occupancy rate will increase to approximately 90% from 68% in September 2009. Key leases signed since RAIT acquired Inlet Square include a cinema and entertainment venue, an apparel store and a nationally recognized kids store.


Inlet Square is a 430,000 square-foot mall anchored by JC Penney, Belk, Kmart and Stein Mart. It recently underwent a $4.5 million renovation to help attract new tenants. Scott Schaeffer, RAIT’s Chief Executive Officer and President, commented, “This is a good example of RAIT using its core real estate knowledge and capabilities to create value within its commercial real estate portfolio.”

Wal-mart Unveils Plans For New Smaller Store Format

Bill Simon, Wal-Mart’s U.S. president and CEO, explained in a statement that the company will move to a three-format portfolio. The large format is the Walmart supercenter, which carries both groceries and general products. The next size smaller — stores between 30,000 square feet and 60,000 square feet — will be based on a market’s specific needs, and the new under 30,000 square foot template will be aimed at small towns and urban markets, according to the statement.



South Carolina Community Impact


Real Estate
As of September 2010, Walmart's presence in South Carolina includes:
Supercenters: 71
Discount Stores: 5
Neighborhood Markets: 0
Sam's Clubs: 9
Distribution Centers: 2

Average store size (national average)
Supercenter: 185,000 sq. ft. with approx. 142,000 items
Discount Store: 108,000 sq. ft. with approx. 120,000 items
Neighborhood Market: 42,000 sq. ft. with approx. 29,000 items
Sam's Club: 132,000 sq. ft. with approx. 5,500 items

People
•As of September 2010, the total number of Walmart associates in South Carolina is 28,255.
•As of September 2010, the average wage for regular, full-time hourly associates in South Carolina is $12.61 per hour (Walmart Discount Stores, Supercenters, and Neighborhood Markets). Additionally, associates are eligible for performance-based bonuses.
•In recent years, Walmart has contributed four percent of an associate's eligible pay to their combined Profit Sharing and 401(k) Plan.

Suppliers
•In FYE 2010, Walmart spent $812,224,336.00 for merchandise and services with 753 suppliers in the state of South Carolina. As a result of Walmart's relationship with these suppliers, Walmart supports 32,683 supplier jobs in the state of South Carolina.
•Supplier figures provided by Dun & Bradstreet.

Taxes and Fees
•Walmart collected on behalf of the state of South Carolina more than $244.6 million in sales taxes in FYE 2010.
•Walmart paid more than $35.3 million in state and local taxes in the state of South Carolina in FYE 2010.

Community Involvement
•In 2009, Walmart stores, Sam's Club locations and the Walmart Foundation gave more than $6.6 million in cash and in-kind donations to local organizations in the communities they serve in the state of South Carolina. Through additional funds donated by customers, and Walmart and Sam’s Club associates throughout the state, the retailer’s contributions in South Carolina totaled more than $9.2 million.

How Long Can Cap Rate Compression Last?

Multifamily Executive - Many multifamily buyers and sellers have been surprised at just how quickly, and how steeply, cap rates have fallen this year.  Several factors have conspired to drive down cap rates a little more each month this year. A wealth of opportunity funds looking for acquisitions has resulted in frenzied bidding wars for Class A assets. Low-priced debt from Fannie Mae and Freddie Mac has allowed more deals to pencil out. And stabilizing fundamentals have inspired confidence in the future value proposition.  But just how sustainable is this cap rate compression? Most multifamily finance professionals don’t expect it to last into next year. In a poll of 168 senior-level professionals conducted by Apartment Finance Today conducted in August, half of all respondents expected cap rates to stay flat in 2011, while more see cap rates rising (27 percent) than falling (23 percent) next year.

“It has to level off,” says Mike McRoberts, national head of production and sales for McLean, Va.-based Freddie Mac. “One thing that’s going to drive cap rates is availability of product, and we’ve already seen an increase in availability of product. That has to have an upward pressure on cap rates.”  In the first six months of the year, there were about 29 multifamily transactions of $10 million or more with cap rates of 6 percent or less. Yet, since the beginning of July—in a span of just over three months—there have been 28 such transactions, according to market research firm Real Capital Analytics.  These range from the very large—last month’s $193 million acquisition by CBRE of the Resort at Pembroke Pines in Hollywood, Fla., drew a 6 percent cap—to smaller assets, such as the $25.5 million acquisition by Trinity Property Group of the 76-unit Clay Park Towers in San Francisco, which had a 5 percent cap rate.

While some of today’s cap rates seem aggressive, when you factor in the price of debt from Fannie and Freddie—around 4 percent for a 10-year loan, and sub-4 percent for a seven-year loan—it makes sense.  “If you’re buying a quality property in a core market with a going-in cap rate around 6 percent, and you’re getting 75 percent leverage at 4 percent, you’re getting huge positive leverage,” says David Rifkind, principal and managing director of Los Angeles-based George Smith Partners. “You’re spitting out cash flow.”  Some in the industry are marveling that in the high-barrier coastal markets, there’s been a return to the cap rates seen at the height of the last boom period. But one notable difference is that cap rate compression is only really seen on the upper echelon of deals in select markets.  “I think we’ll continue to see the cap rate differentiation that we hadn’t seen four or five years ago,” says Michael Berman, president and CEO of Needham, Mass.-based CWCapital. “We’re seeing cap rates of 4 percent for really fine, triple A properties, but B and C properties aren’t seeing that kind of compression.”

The high-barrier coastal markets have experienced the biggest cap rate declines. But some believe that the dynamic will soon begin to emerge in the Midwest as well.  “On the coasts, it’s always a little bit of an anomaly. In the Midwest, we’re not seeing a lot of transactions of stabilized, well-occupied properties yet,” says Greg Cazel, executive vice president of Midwest markets for Boise, Idaho-based lender A10 Capital. “But as we continue to see leasing and occupancy strengthen like we’ve seen for the past 18 months, I think cap rates are going to continue to come down.”  Everyone knows, however, that today’s interest-rates can’t last, and that it’s impossible to time the bottom. The economy will enter into an inflationary period sooner or later. “Based on the federal deficit and the capacity of the economy, at some point we’re going to be back in an inflationary period,” says Berman. “And when that happens, cap rates will drift up again.”  But for now, interest rates continue to fall and the pace of transactions continues to rise. The fourth quarter is shaping up to be the kind of “busy season” that we haven’t seen in a few years. Carpe Diem.