Wednesday
Myrtle Beach in-line for new adventure
Sun News - A group of investors has signed a four-year lease with The Burroughs & Chapin Co., Inc, to use the smaller of the two former Pavilion sites along with a few acres on the South End of Myrtle Beach for two new zip-line adventure courses. Adrenaline Adventures, a group of businessmen from Columbia, Ohio, Tennessee and Kentucky, would like to have the new zip-line courses open by March 1. The city’s Community Appearance Board gave a nod to the conceptual plans, but no official approval or permits have been granted yet. “We’re all very excited about this, but it’s still preliminary,” said architect Tom Miller of Miller Design Services in Myrtle Beach. His firm is tasked with designing the sales cabanas and zip-line towers around two themes: The former Pavilion site’s theme will be a “Carolina Beach-shabby-shack” theme, while the property on South Ocean Boulevard between Springmaid resort and Damon’s restaurant will have a “Swiss Family Robinson-tiki” theme. The South Ocean Boulevard course will be named Ocean View Zip Line Adventures, and the course on the former Pavilion site will be called Myrtle Beach Adrenaline Adventures. Morgan Armstrong of Columbia, one of Adrenaline Adventures’ principal members, said designs are still in the early stages, and Miller said everything will have to be cleared by structural engineers to make sure “it can stand in the real world.” The courses will take zip-liners from tower to tower on very fast rides, Armstrong said. “It’s going to be huge fun,” he said. “It’ll be like you’re flying.” The city limits the height of the structures to 65 feet, and Armstrong said the plans are to “max that out.” The company also plans a drop tower at each site, and a children’s zip-line course and play area at the larger South Ocean Boulevard site. Large drop towers have gondolas and carry many passengers, but Adrenaline Adventures’ towers will be more like big bungee jumps with passengers attached to a line that spools out as they descend. Leasing the properties, he said, works for his company, B&C and the city, because it utilizes B&C’s property until the company decides what else it might want to do with it, brings a new attraction and more revenue to the city, and will hopefully be a moneymaker for Adrenaline Adventures. “This is going to be a big attraction in Myrtle Beach, Armstrong said. “The drop towers will have people lined up around the block.” Burroughs & Chapin said it does not comment on contractual matters. Before construction can begin, the company must have all its plans OK’d by the appearance board and line up all the city building permits. The next appearance board meeting is Dec. 15, and Armstrong said if all goes well, construction could begin in late December or early January. The Downtown Redevelopment Corporation wrote a letter to the city backing the project. “We think it’s a good temporary addition to the downtown,” said Executive Director David Sebok. “We’re very supportive of it.”
Thursday
Lodging fee for guests in the works for North Myrtle Beach
Sun News - North Myrtle Beach area lodging properties could pay more starting next year to raise money to buy advertisements promoting the beach destination. The North Myrtle Beach Chamber of Commerce, which proposed the $1 a night fee as part of its five-year growth strategy, is working out the details and recruiting lodging properties to participate. Guests to the properties participating will pay $1 a night that will go toward advertisements that the Marketing Co-op, a chamber committee made up of representatives of the participating properties, will decide how to spend. The fee will start in February, said Marc Jordan, president of the North Myrtle Beach chamber. About six properties have expressed interest in participating, including Elliott Realty and Myrtle Beach Seaside Resort, he said, adding he plans to recruit more businesses. "We are in the process of getting everything set up,” Jordan said. Jordan estimates the fee could bring in as much as $500,000 for out-of-market advertising. The money likely would be spent on Internet ads because that’s a popular way to reach potential visitors these days, but it also could go for TV spots in big markets the chamber can’t afford to advertise in with its current $1 million annual marketing budget, Jordan said. The Marketing Co-op would decide the details. The extra money is needed so the area can lure more visitors through advertising, Rick Elliott, chairman of the growth strategy group, said in a news release. “These additional dollars will allow for a targeted marketing message to better brand North Myrtle Beach businesses and North Myrtle Beach,” he said. The $1 a night charge isn’t likely to turn off tourists already booking rooms because it’s a small amount, Jordan said. He compared it to the sales and accommodations taxes visitors already pay. Still, consumers nationwide have been reluctant to pay more fees during the down economy. “People pay these fees all the time,” Jordan said. “A dollar probably isn’t going to make a big difference to them. It makes a big difference to us.” The nightly fee wouldn’t be new along the Grand Strand. Several years ago – before the controversial 1-cent sales tax for tourism in Myrtle Beach – a group of Myrtle Beach hoteliers used the same strategy, creating a nightly room charge to raise money to market the destination. Jordan envisions eventually taking this concept to restaurants by adding $1 to a table’s bill. But for now, he’s focusing on getting the lodging fee going. The fee is part of the chamber’s five-year growth strategy, dubbed “Building North Myrtle Beach,” which also includes plans to lure a major attraction to the north end and diversify the beach’s economy.
Grand Strand prices fall more than most areas in S.C.
Sun News - While real estate prices made modest gains statewide, Grand Strand prices continued to fall last month, according to the South Carolina Realtors association. The median price – the price at which half sold for less and half sold for more – of a home, condo or villa along the Grand Strand was $135,000 in September, a 6.9 percent drop from the same month last year. The Grand Strand had the second largest drop in price of any area in the state in September; only the Greenwood area, with a 20 percent drop, lost more value, according to the Realtors group. The southern midlands and western upstate areas had the largest gains in price, with 24 percent and 10 percent respectively. Statewide the median price of a home, condo or villa was $150,000, a 1 percent increase from September 2010, according to the Realtors group. Many of the communities that have started seeing prices increase have more permanent residents and don’t have the high proportion of vacation and investment properties, said a real estate analyst with the Coastal Carolinas Association of Realtors. “Investors are more apt to leave a property or allow it to go into foreclosure than a permanent resident would be. The end result is that prices drop,” he said.
Grand Strand real estate prices have been dropping consistently, but sales have fluctuated and last month about 1.9 percent fewer properties sold than did in September 2010, according to the Realtors group. Statewide, sales dropped 10.4 percent in September when compared to the same month last year. Beaufort, Greenwood and the York County and Lancaster County areas had the biggest drops in sales with 37.1 percent, 33.3 percent and 22.8 percent fewer sales respectively, according to the South Carolina Realtors association. Several areas in the state had significantly more properties sold in September, including the Aiken area where 41.4 percent more properties sold than last year, according to group.
Grand Strand real estate prices have been dropping consistently, but sales have fluctuated and last month about 1.9 percent fewer properties sold than did in September 2010, according to the Realtors group. Statewide, sales dropped 10.4 percent in September when compared to the same month last year. Beaufort, Greenwood and the York County and Lancaster County areas had the biggest drops in sales with 37.1 percent, 33.3 percent and 22.8 percent fewer sales respectively, according to the South Carolina Realtors association. Several areas in the state had significantly more properties sold in September, including the Aiken area where 41.4 percent more properties sold than last year, according to group.
Waccamaw Bank to sell 11 branches, including those in Horry County
Sun News - Waccamaw Bank will be selling 11 of its branches, including those in Horry and Brunswick counties, to First Bank, if regulators approve the deal. First Bank will buy all of the buildings and equipment at the branches, gain about $180 million in deposits and buy $98 million in performing loans, First Bancorp, the parent company of First Bank and Waccamaw Bankshares, Inc., the parent company of Waccamaw Bank announced Monday. The sale is expected to be completed in the first three months of next year.
New uses for shopping malls
WSJ.com - Sobered by store closings and the rise of online shopping, owners of U.S. shopping centers are filling space and drawing visitors by turning to unusual tenants like gun ranges and go-cart tracks. Mall giant Simon Property Group Inc. opened an aquarium in July at its Grapevine Mills mall near Dallas. Real-estate brokerage Jones Lang LaSalle Inc. put a fencing academy in a former Old Navy store in Florida's Tallahassee Mall, and a community theater on the lower level of a former Boscov's store in Harrisburg, Pa. Aqua Tots Holdings LLC, a business that teaches youngsters to swim, has expanded to 14 locations in Arizona, Texas and Georgia and has 10 more on the way, nearly all in former retail shops. Jumpstreet, an indoor trampoline facility, is buying or leasing former grocery stores, filling them wall-to-wall with trampolines and charging patrons for hourly access. Perhaps the most unusual use of a former big-box store is William James's Arms Room gun shop and shooting range, which opened last year in a former Circuit City store south of Houston. Mr. James spent nearly $5 million to buy the 20,000-square-foot space and convert it into a shooting range, a price he considered a bargain compared with building from scratch. The Arms Room offers handgun training courses in addition to traditional shooting practice, all in a popular shopping center anchored by Target Corp. and Home Depot Inc. stores.
"It was sort of providential," Mr. James said in his Arms Room office, surrounded by antique swords and modern firearms. "I never dreamed of a place like this." Rising retail vacancies, and loosening rent demands from landlords at struggling shopping centers, are creating opportunity for tenants previously housed in community centers, industrial parks and home basements. "In the past, we've typically been in industrial parks because of the [low] cost per square foot," said Howard Picker, founder of Speed Raceway, which is preparing to open indoor go-cart tracks next year in former big-box stores in Colorado, Pennsylvania and New Jersey. But retail landlords "are coming down on price and more willing to work with tenants like us," he said. The proliferation of "nonretail" tenants comes as traditional stores cede ground in U.S. shopping centers because of constrained consumer spending and decades of retail overbuilding in the U.S. Real-estate research company CoStar Group Inc. examined a sample of roughly 830 million square feet of retail space—6.8% of the U.S. total—and found that entertainment-themed tenants like movie theaters and laser-tag complexes expanded their collective square footage in U.S. shopping centers by 2.25% since 2009 while service-themed tenants like schools and health clubs grew at a 3.65% clip. Conversely, retailers and restaurants in that period each reduced their collective square footage by nearly 1%.
Landlords are embracing unusual tenants as a way to continue drawing visitors to their shopping centers, even if those patrons aren't necessarily coming to shop. A little extra traffic generated by a gym or a trampoline center is better than an empty storefront that draws no one, they say. "They're good users, and they pay good rent," says David Henry, chief executive of Kimco Realty Corp., which owns stakes in 946 shopping centers world-wide. "In many cases, they are complementary" to the retailers in a given center, he said. Nontraditional tenants, in many cases, though, don't pay as high a rent as major chains would pay. What's more, nonretail tenants often don't pay percentage rents, a form of bonus rent that retailers pay from a small percentage of their sales when they exceed a certain threshold. Even top performing mall companies—like Simon, which reported a 19% rise in earnings Tuesday—are looking at restaurants, entertainment and other nonretail uses as a hedge against the drain from online shopping. Glimcher Realty Trust purposefully filled 25% of its upscale Scottsdale Quarter mall near Phoenix with restaurants such as Stingray Sushi and services like Drybar, a salon that specializes in blow drying women's hair. "She can't go out to lunch and have a salad and a glass of wine with her girlfriends online," Glimcher Chairman and CEO Michael Glimcher said, referring to the mall industry's coveted female shoppers.
Struggling shopping centers, like the Tallahassee and Harrisburg malls, meanwhile, are signing nonretail tenants because no one else is lining up for the space. But adding a tenant with limited potential to bring shoppers to the rest of the center—like classrooms or a church—often isn't popular with existing tenants. The move can be seen as giving up on the center as a retail venue. The Arms Room gun range near Houston had a mixed reception. Mr. James's attorneys advised him to seek written statements from Target and Home Depot declaring that they didn't object to his business opening in their shopping center. Home Depot agreed, but Target declined, Mr. James said. (Target declined to comment). Later, representatives of PetSmart Inc. thanked him for boosting the center's customer traffic, he said. There are no immediate plans for additional Arm Room locations. Jin Dong, the manager of a Mattress Giant store that shares a wall with the Arms Room, is one of the gun range's happy neighbors. "People do come in here with guns, and that's kind of weird. But they have brought a lot of traffic. It's way better than nothing," he said. "I'll tell you one thing, I don't have to worry about getting robbed, that's for sure."
"It was sort of providential," Mr. James said in his Arms Room office, surrounded by antique swords and modern firearms. "I never dreamed of a place like this." Rising retail vacancies, and loosening rent demands from landlords at struggling shopping centers, are creating opportunity for tenants previously housed in community centers, industrial parks and home basements. "In the past, we've typically been in industrial parks because of the [low] cost per square foot," said Howard Picker, founder of Speed Raceway, which is preparing to open indoor go-cart tracks next year in former big-box stores in Colorado, Pennsylvania and New Jersey. But retail landlords "are coming down on price and more willing to work with tenants like us," he said. The proliferation of "nonretail" tenants comes as traditional stores cede ground in U.S. shopping centers because of constrained consumer spending and decades of retail overbuilding in the U.S. Real-estate research company CoStar Group Inc. examined a sample of roughly 830 million square feet of retail space—6.8% of the U.S. total—and found that entertainment-themed tenants like movie theaters and laser-tag complexes expanded their collective square footage in U.S. shopping centers by 2.25% since 2009 while service-themed tenants like schools and health clubs grew at a 3.65% clip. Conversely, retailers and restaurants in that period each reduced their collective square footage by nearly 1%.
Landlords are embracing unusual tenants as a way to continue drawing visitors to their shopping centers, even if those patrons aren't necessarily coming to shop. A little extra traffic generated by a gym or a trampoline center is better than an empty storefront that draws no one, they say. "They're good users, and they pay good rent," says David Henry, chief executive of Kimco Realty Corp., which owns stakes in 946 shopping centers world-wide. "In many cases, they are complementary" to the retailers in a given center, he said. Nontraditional tenants, in many cases, though, don't pay as high a rent as major chains would pay. What's more, nonretail tenants often don't pay percentage rents, a form of bonus rent that retailers pay from a small percentage of their sales when they exceed a certain threshold. Even top performing mall companies—like Simon, which reported a 19% rise in earnings Tuesday—are looking at restaurants, entertainment and other nonretail uses as a hedge against the drain from online shopping. Glimcher Realty Trust purposefully filled 25% of its upscale Scottsdale Quarter mall near Phoenix with restaurants such as Stingray Sushi and services like Drybar, a salon that specializes in blow drying women's hair. "She can't go out to lunch and have a salad and a glass of wine with her girlfriends online," Glimcher Chairman and CEO Michael Glimcher said, referring to the mall industry's coveted female shoppers.
Struggling shopping centers, like the Tallahassee and Harrisburg malls, meanwhile, are signing nonretail tenants because no one else is lining up for the space. But adding a tenant with limited potential to bring shoppers to the rest of the center—like classrooms or a church—often isn't popular with existing tenants. The move can be seen as giving up on the center as a retail venue. The Arms Room gun range near Houston had a mixed reception. Mr. James's attorneys advised him to seek written statements from Target and Home Depot declaring that they didn't object to his business opening in their shopping center. Home Depot agreed, but Target declined, Mr. James said. (Target declined to comment). Later, representatives of PetSmart Inc. thanked him for boosting the center's customer traffic, he said. There are no immediate plans for additional Arm Room locations. Jin Dong, the manager of a Mattress Giant store that shares a wall with the Arms Room, is one of the gun range's happy neighbors. "People do come in here with guns, and that's kind of weird. But they have brought a lot of traffic. It's way better than nothing," he said. "I'll tell you one thing, I don't have to worry about getting robbed, that's for sure."
Outlook brightens for outlets
ICSC.org - While economic indicators point to a continued, albeit slow, recovery, unemployment and consumer confidence remain the two main sources of concern for landlords and retailers, noted Cushman & Wakefield’s Richard W. Latella at VRN’s Fall Outlet Leasing & Marketing Conference Monday. Consumer sentiment fell in August by 19.2 percent year-over-year, and stands just 40 basis points above the low set in November 2008, he noted. GDP growth is expected to total 1.6 percent in 2011, he said, quoting a Wall Street Journal article. Retail sales growth for the year will reach 3.8 percent, according to an ICSC report. There are other more positive signs of recovery, though. Retail real estate transaction volumes in the U.S. reached $22.1 billion in the first seven months of 2011, marking a 184.4 percent increase over the same period in 2010. Retail cap rates averaged 7.56 percent in the second quarter of this year, according to Cushman & Wakefield, representing a year-over-year decrease of 39 basis points. Store closings have dropped sharply, with a total 2,329 in the first half of this year, compared to 4,396 for the same period last year, according to ICSC. And new store openings are up, he noted. The outlet sector is attracting particular interest, says Latella, an executive managing director who is Americas practice leader in Cushman’s Retail Industry Specialty Group. “There are real signs of growth in the outlet sector,” he said. Some 36 projects have changed hands in the past two years, for a total $2.8 billion, compared to just $562 million in transactions in the two years from 2007 to 2009. There is particular interest coming from conventional mall REITs, such has Macerich, he noted. “There is a flight to quality favoring trophy and core assets.” Retailers too are being attracted to outlet centers by their lower operating costs and higher sales-per-square feet performances. Outlet REIT sales reached a record $482 per square foot last year, compared to $437 for mall REITs, he said, and annual growth in outlet center sales has outstripped that of malls by an average of 91 basis points since 1995.
Self-Storage Performance in a Recession: Why This Slump Is Different From Past Downturns
ISS.com - The self-storage market has improved, but it’s clear the industry is experiencing a different dynamic in today’s environment. While the current economic climate has raised questions about resiliency in the property type, a more fundamental question is whether existing and potential tenants have changed their habits around self-storage. In past recessionary periods of the early 1990s and 2001-2003, self-storage occupancies and revenue were generally not negatively impacted. For most facilities, revenue continued to increase year over year, and self-storage development turned out quite well for investors and developers. The following table shows recent quarter-over-quarter changes in rental rates and occupancies based on a nationwide survey conducted by Integra Realty Resources. This reflects the nationwide market and illustrates current market conditions, which are unlike any historic trends.
Period Rental Rate Occupancy
1Q 2010 -2.2% -0.6%
2Q 2010 0.0% -0.3 %
3Q 2010 -5.2 % -1.2 %
4Q 2010 -1.1% -3.3 %
1Q 2011 0.0 % -3.5%
2Q 2011 -2.2% -3.5%
In this most recent recession, history has not repeated itself. Because of cuts to many individual incomes, elevated unemployment and lower purchasing power, the use of storage has moved into a more discretionary spending category. The result has been a slow but progressive slide in rental rates and revenue. A review of recent revenue changes at more than 100 self-storage facilities in major markets nationwide shows many markets are starting to settle or experience a slowdown. In 2010, revenue decreased by 5.2 percent. During the first two quarters of 2011, it decreased by 1 percent.
What Changed?
The change from prior recessions is multi-faceted. After around 1995, self-storage construction spiked, with a massive amount of development taking place in most major markets. With historic strong returns for existing facilities, this property type caught on not only with existing owners but first-timers wanting to enter the industry. The financial barriers caused by limited financing were also toppled as banks and institutions specifically sought out this property class for loans. As most developers were not known for strong due diligence and lending sources focused on just placing loans, the overall inventory increased between 1995 and 2007 by about 25 percent.
Period Rental Rate Occupancy
1Q 2010 -2.2% -0.6%
2Q 2010 0.0% -0.3 %
3Q 2010 -5.2 % -1.2 %
4Q 2010 -1.1% -3.3 %
1Q 2011 0.0 % -3.5%
2Q 2011 -2.2% -3.5%
In this most recent recession, history has not repeated itself. Because of cuts to many individual incomes, elevated unemployment and lower purchasing power, the use of storage has moved into a more discretionary spending category. The result has been a slow but progressive slide in rental rates and revenue. A review of recent revenue changes at more than 100 self-storage facilities in major markets nationwide shows many markets are starting to settle or experience a slowdown. In 2010, revenue decreased by 5.2 percent. During the first two quarters of 2011, it decreased by 1 percent.
What Changed?
The change from prior recessions is multi-faceted. After around 1995, self-storage construction spiked, with a massive amount of development taking place in most major markets. With historic strong returns for existing facilities, this property type caught on not only with existing owners but first-timers wanting to enter the industry. The financial barriers caused by limited financing were also toppled as banks and institutions specifically sought out this property class for loans. As most developers were not known for strong due diligence and lending sources focused on just placing loans, the overall inventory increased between 1995 and 2007 by about 25 percent.
Growth in senior numbers spurs special housing
Sun News -The rapidly growing senior population along the Grand Strand is driving the need for housing and developments that cater to the group that wants to live independently for as long as possible. Housing, especially affordable housing, is one of the most important needs for the area’s aging population, said Ray Fontaine, director of the Horry County Council on Aging. “I don’t mean the stereotypical housing project but a decent, clean respectable community that is aesthetically pleasing,” he said. The early retiree population in Horry County – those between 55 and 64 – grew about 73.5 percent during the past 10 years, according to the U.S. Census Bureau. The number of residents above the age of 65 grew 56 percent between 2000 and 2010, compared to the roughly 35 percent growth of 18 to 64 year old residents, according to the Census. The aging population has created a demand for more accessible houses with specialized features to accommodate aging bodies, more age-restricted communities and developments that offer some assistance.
The growing demand has meant rapid growth for communities catering to seniors, including Seasons at Prince Creek West, a 55-plus active adult neighborhood and Brightwater, which is a continuing care living community that provides independent living, assisted living and skilled nursing. “The market is huge,” said Rainbow Russell, the marketing director for Seasons. “How many millions of people are in this age group right now, and they’re looking for this sort of lifestyle and this sort of home.” Dutch and Emily Lichtmann were looking for a home where they would have to do less maintenance and could have a good sense of community, which is what led them to Brightwater a little more than a year ago. The upkeep and maintenance on the house they’d lived in since they moved to the area was getting to be too much and they wanted to live somewhere where they could do less and be more secure, Emily Lichtmann said. “We thought the more we’re aging, having a few health problems, it would be good to feel more secure and also relieve the children of any worries,” she said, adding “and it gives you more of a social outlet.”
Security, accessibility and a sense of community are key factors that many seniors are looking for as they try to stay independent for as long as possible, several senior housing experts and seniors said. In the past seniors would move to Myrtle Beach to retire but when they got older they would move back north or to wherever their families were, said Harry Dill, the president of the Horry Georgetown Home Builders Association. “Now more are staying here, which creates a demand for aging in place,” he said. The association’s training classes to become a Certified Aging in Place Specialist, a designation offered by the National Home Builders Association, have been full as more builders look to hone their understanding and skills of what the aging population will need. Wide doorways and hallways that allow for a walker or wheelchair are important, as are accessible bathrooms, or bathrooms that can be made accessible. In his company Sterling Homes, Dill has redesigned plans to make wider doorways standard and often does a standalone shower that wouldn’t require the resident to step into a bathtub, which can be difficult for older residents. He also builds homes so that it’s easier to add safety and accessibility features, such as grab bars in the shower or a lower sink that can accommodate a wheelchair.
“I would say anybody that doesn’t go study this aging in place is missing the boat,” Dill said. “We’re going to see it in almost all new construction in an area like us where we’re a destination area and there’s a lot of retirees.” The design changes aren’t difficult and new products that are easy to install continue to be released, he said. Combining those accessibility features with community activities has been a good business strategy for Seasons, which sold 98 houses last year and already about 40 this year, Russell said. “That’s kind of the general trend, people are looking to change their lives, do something different and retire,” she said. The residents have created an active community with regular events, card games and golf outings scheduled throughout the week. Many of the residents are from the Northeast and bought here because of lower taxes, more affordable properties and the location being about a day’s drive from their previous home, Russell said. About 200 of the 460 homes - which range in size from 1,600 to 2,500 square feet and cost between $219,900 and $304,900 - have been sold, she said. “We’ve got a ways to go, two or three years, before we sell out, build out and of course we’d be looking to do another 55-plus here,” Russell said.
The Horry County Council on Aging, which primarily provides services and operates senior centers in the county, has also decided to build affordable senior apartments, to help meet the large need, Fontaine said. Last year the council won a federal housing grant to fund affordable senior apartments off Heritage Road outside of Loris. The planned complex will have 28 apartments and a senior center on about 15 acres. Seniors with low or fixed incomes will be eligible to live in the apartments and the average cost per person will be about $350 a month. There have been some delays on the project because the federal approvals have moved slowly, but after dealing with problems with groundwater runoff and sewage, construction should start in the next month, Fontaine said. Brightwater, which is for residents 62 years old and up, has also been growing and opened an additional 32 skilled nursing beds and the secure 24-bed Alzheimer’s and memory care unit last week. The concept at Brightwater is a bit different – the development has an independent living section, an assisted living section, a skilled nursing section and an Alzheimer’s and memory care unit. The idea being that as residents age and need more care, they can stay in the community but move to a different area. “We’re covering the entire spectrum,” said executive director Jimmy Justice. “They switch over back and forth all the time and that’s kind of the whole plan here, to keep you in the same area as long as possible.”
Horry County is popular with seniors and there is definitely a strong demand for housing that is tailored for them, he said. “This is the start. It’s kind of a new industry. We’re going to need more and more of these as the tsunami of baby boomers ages,” said Barbara Gans, the lifestyle adviser at Brightwater. In the independent living section, residents can have an apartment or a house, but have all their repairs done for them, can eat in the dining room, have a weekly cleaning service and an emergency alert system, which calls onsite security and medical staff. Brightwater also puts an emphasis on activities – anything from ping pong tournaments to water aerobics – to keep the residents active and engaged, Gans said. “As you age just having good socialization around you has proven to extend your life,” she said. The community is part of what drew Vivian Gilmer to Brightwater about a year and a half ago. “I was sort of isolated before,” she said. “[Now] I have a lot of new friends.” Having fewer bills, not having to cook and the safety of the community are also big benefits, Gilmer said. Gilmer didn’t want to have to move closer to family in Virginia because she likes Myrtle Beach and this way, with her apartment, she can stay and her family doesn’t have to worry, she said. “There’s just so many advantages of just common, ordinary conveniences,” she said. “I have more time to do the things I really want to do.”
The growing demand has meant rapid growth for communities catering to seniors, including Seasons at Prince Creek West, a 55-plus active adult neighborhood and Brightwater, which is a continuing care living community that provides independent living, assisted living and skilled nursing. “The market is huge,” said Rainbow Russell, the marketing director for Seasons. “How many millions of people are in this age group right now, and they’re looking for this sort of lifestyle and this sort of home.” Dutch and Emily Lichtmann were looking for a home where they would have to do less maintenance and could have a good sense of community, which is what led them to Brightwater a little more than a year ago. The upkeep and maintenance on the house they’d lived in since they moved to the area was getting to be too much and they wanted to live somewhere where they could do less and be more secure, Emily Lichtmann said. “We thought the more we’re aging, having a few health problems, it would be good to feel more secure and also relieve the children of any worries,” she said, adding “and it gives you more of a social outlet.”
Security, accessibility and a sense of community are key factors that many seniors are looking for as they try to stay independent for as long as possible, several senior housing experts and seniors said. In the past seniors would move to Myrtle Beach to retire but when they got older they would move back north or to wherever their families were, said Harry Dill, the president of the Horry Georgetown Home Builders Association. “Now more are staying here, which creates a demand for aging in place,” he said. The association’s training classes to become a Certified Aging in Place Specialist, a designation offered by the National Home Builders Association, have been full as more builders look to hone their understanding and skills of what the aging population will need. Wide doorways and hallways that allow for a walker or wheelchair are important, as are accessible bathrooms, or bathrooms that can be made accessible. In his company Sterling Homes, Dill has redesigned plans to make wider doorways standard and often does a standalone shower that wouldn’t require the resident to step into a bathtub, which can be difficult for older residents. He also builds homes so that it’s easier to add safety and accessibility features, such as grab bars in the shower or a lower sink that can accommodate a wheelchair.
“I would say anybody that doesn’t go study this aging in place is missing the boat,” Dill said. “We’re going to see it in almost all new construction in an area like us where we’re a destination area and there’s a lot of retirees.” The design changes aren’t difficult and new products that are easy to install continue to be released, he said. Combining those accessibility features with community activities has been a good business strategy for Seasons, which sold 98 houses last year and already about 40 this year, Russell said. “That’s kind of the general trend, people are looking to change their lives, do something different and retire,” she said. The residents have created an active community with regular events, card games and golf outings scheduled throughout the week. Many of the residents are from the Northeast and bought here because of lower taxes, more affordable properties and the location being about a day’s drive from their previous home, Russell said. About 200 of the 460 homes - which range in size from 1,600 to 2,500 square feet and cost between $219,900 and $304,900 - have been sold, she said. “We’ve got a ways to go, two or three years, before we sell out, build out and of course we’d be looking to do another 55-plus here,” Russell said.
The Horry County Council on Aging, which primarily provides services and operates senior centers in the county, has also decided to build affordable senior apartments, to help meet the large need, Fontaine said. Last year the council won a federal housing grant to fund affordable senior apartments off Heritage Road outside of Loris. The planned complex will have 28 apartments and a senior center on about 15 acres. Seniors with low or fixed incomes will be eligible to live in the apartments and the average cost per person will be about $350 a month. There have been some delays on the project because the federal approvals have moved slowly, but after dealing with problems with groundwater runoff and sewage, construction should start in the next month, Fontaine said. Brightwater, which is for residents 62 years old and up, has also been growing and opened an additional 32 skilled nursing beds and the secure 24-bed Alzheimer’s and memory care unit last week. The concept at Brightwater is a bit different – the development has an independent living section, an assisted living section, a skilled nursing section and an Alzheimer’s and memory care unit. The idea being that as residents age and need more care, they can stay in the community but move to a different area. “We’re covering the entire spectrum,” said executive director Jimmy Justice. “They switch over back and forth all the time and that’s kind of the whole plan here, to keep you in the same area as long as possible.”
Horry County is popular with seniors and there is definitely a strong demand for housing that is tailored for them, he said. “This is the start. It’s kind of a new industry. We’re going to need more and more of these as the tsunami of baby boomers ages,” said Barbara Gans, the lifestyle adviser at Brightwater. In the independent living section, residents can have an apartment or a house, but have all their repairs done for them, can eat in the dining room, have a weekly cleaning service and an emergency alert system, which calls onsite security and medical staff. Brightwater also puts an emphasis on activities – anything from ping pong tournaments to water aerobics – to keep the residents active and engaged, Gans said. “As you age just having good socialization around you has proven to extend your life,” she said. The community is part of what drew Vivian Gilmer to Brightwater about a year and a half ago. “I was sort of isolated before,” she said. “[Now] I have a lot of new friends.” Having fewer bills, not having to cook and the safety of the community are also big benefits, Gilmer said. Gilmer didn’t want to have to move closer to family in Virginia because she likes Myrtle Beach and this way, with her apartment, she can stay and her family doesn’t have to worry, she said. “There’s just so many advantages of just common, ordinary conveniences,” she said. “I have more time to do the things I really want to do.”
North Myrtle Beach council gives nod to annex nearly 1,900 acres
Sun News - NORTH MYRTLE BEACH -- The City Council has given an initial approval to expand the city by more than 1,800 acres west of the Intracoastal Waterway. The council took a first vote Monday night on the proposal to annex about 1,877 acres west of the waterway near Robert Edge Parkway into the city. The council also had a second public hearing on a development agreement between the city and landowners SLF IV/SBI Sandridge LLC, SLF IV/SBI Bay Landing LLC, SLF IV/SBI Spice Hill LLC and Main Street Commercial Partners LLC. According to the development agreement - which the council also initially approved Monday - more than 1,460 acres would be zoned for single-family homes, multifamily homes and/or commercial units, and the city will purchase about 136 acres from Sandridge for a sports tourism facility and about 8.5 acres from Main Street for access to the park site. Resident Robert Flanagan expressed concerns about why the city is purchasing land for the sports facility and has increased its property tax rate from 32 mills to 38 mills over an eight-year period to pay off a $15 million general obligation bond being used to pay for the facility and the site it will occupy. "In this time of recession, I don't understand now buying all this property," Flanagan said. "There's a lot of ways to spend money. I don't see spending money out there in the wilderness." Mayor Marilyn Hatley said the sports facility is for the community and economic growth in the city. "We're talking about at a time the lowest you can buy land," Hatley said. "Even with the 6-mill raise, you still have the lowest millage in the whole county. We have to continue to invest in our community, in our youth." Though pleased with majority of the final work regarding the proposed development agreement and proposed annexation, Councilmen Greg Duckworth and Bob Cavanaugh expressed concerns about the timeline in the development agreement for the city to build an access road to the park site. According to the agreement, the city will begin construction of the road within 60 months from the effective date of the agreement. If the city is unable to meet the time frame, then the landowners have the right to terminate the right-of-way dedication for that portion of the road. "We have a lot of timelines, including building the road, but they [developers] don't have a built-out timeline," Cavanaugh said. "Are we going to build a road before development?" Cavanaugh and Duckworth said they want the issue reconsidered before the council takes a final vote on the development agreement, which could be at its June 20 meeting.
Sports complex a go, as is tax hike in North Myrtle Beach
Sun News - Council approves $15 million bond - NORTH MYRTLE BEACH -- A new sports tourism facility could be opened to North Myrtle Beach residents and visitors at least two years from now, according to city officials. City Council members gave a final approval Monday night to a $15 million general obligation bond to pay for the facility and the site it will occupy, as well as an eight-year, 6-mill property tax increase - that will raise North Myrtle Beach's property tax rate to 38 mills - to pay off the $15 million bond. After the eight years, the city's property tax rate would revert to 32 mills, city officials said. Councilwoman Doris Williams and Councilmen Greg Duckworth and Jay Baldwin were absent. Several residents raised concerns Monday about the tax increase at a time of a downturn in the economy while some think the timing is right to bring in a sports facility that will be beneficial for the city. "I think it's terrible, in the worst depression, to want to raise any money," said resident Gene Sheppard. "We don't need any more burden on us." Resident Marti Drummond said she thinks the facility is "a wonderful thing." "We have to look at the big picture," Drummond said. "It will bring money into the city and help keep taxes down. There's not one person in the city that won't benefit from it." The planned sports facility is part of more than 1,800 acres of land that could be annexed into the city west of the Intracoastal Waterway near Robert Edge Parkway and S.C. 31. A request to annex and zone the land into the city and a development agreement between the city and landowners SLF IV/SBI Sandridge LLC, SLF IV/SBI Bay Landing LLC, SLF IV/SBI Spice Hill LLC, and Main Street Commercial Partners LLC, will go before the city's Planning Commission today. The commission would then forward its recommendations on the proposed annexation and development agreement to the City Council. According to the development agreement, more than 1,460 acres would be zoned for single-family homes, multifamily homes and/or commercial units, and the city will purchase 133 acres for the sports tourism facility and 6.8 acres for an access road to the park site. The sports facility will include eight multipurpose playing fields, an amphitheater, a water play area, walking trails and a dog park, according to city spokesman Pat Dowling. A new, bigger facility will help grow both sports tourism and local use as the city's existing sports fields and facilities are already full with sports tourism events, Dowling has said. He said the city's existing fields and facilities are 60 percent used by residents and 40 percent used for sports tourism.
Former North Myrtle Beach golf course back up for sale
Sun News - The former Robber’s Roost golf course in North Myrtle Beach is up for sale again after the developers that shepherded through a master plan to reinvent the property fell victim to the economic downturn. The property’s original owners, Tiente Limited Partnership and Burgess Investments Group Family Limited Partnership, took back possession of the property after foreclosure late last year and are now actively marketing the roughly 100 acre property that has thousands of feet of frontage on U.S. 17. The property will likely sell as three separate pieces, though the owner would prefer to sell it all together, said Macon Lovelace, a broker for NAI Avant, who is marketing the property. "It’s just more likely that in today’s development environment that you have two different types of developers that go in there,” he said.
Lovelace said that the company has reached out to active mixed-use developers it has relationships with to tell them about the property. “We’re aware of a handful of tenants who are interested in being in the North Myrtle Beach market and were waiting for this type of location to become available,” he said. Given the current lagging economy, the development is likely to be completed in stages over time and be driven by tenant demand, Lovelace said. “Nobody is going to buy this on a speculative basis, as is with any raw land and developments occurring anywhere right now,” he said. Previous developers created a planned development district for the area and got all of the approvals from the planning commission and city council. That planned development district will now be the foundation for any future development. The city approved the plan in 2009, but the recession put the development on hold, leaving the former golf course overgrown. The development district divides the property into three specific sections: a town center, village shops and a residential community.
The goal was to create a walkable community and the town center would be a similar concept to The Market Common in Myrtle Beach, said Greg Duckworth, the founder of Environmental Concepts, LLC, which developed the plans. Duckworth is also a North Myrtle Beach city councilman. A lot of work went into studying traffic patterns and addressing the concerns and needs of the existing neighboring residential communities, Duckworth said. The town center is designed to have a movie theater, a large anchor retailer such as Kohl’s, and several smaller retail and restaurant spaces. There would be residential or office space above the stores. The town center, which is envisioned as a more urban area, would also have a central lawn area to be used for gatherings, concerts and other activities. It is one of the many green spaces in the development, which proposed several parks and planted buffer areas separating the commercial and residential areas. Nearly 20 percent of the development was slated to be kept as open space. The plan was for a few businesses right along U.S. 17 and several live-work townhomes in the town center area as well.
The village shops area would have a few stores along U.S. 17 and then a number of small shops, such as boutiques, gift stores, hair salons around a lake. The residential neighborhood was designed to have 164 single-family home lots that averaged 6,233 square feet. There would be a total 394 residential units in the three phases. “It has to be neighborhood friendly,” Duckworth said. “There is a lot of passion on all sides of this situation.” Pat Dowling, a spokesman for the City of North Myrtle Beach, said that plan in place is high quality and the city would like to stay close to its guidelines. Lovelace said that any potential buyer will know that they have to work within the zoning in place, but some changes will likely have to be made and would go through the traditional approval process. The existing plan may not be feasible in the current economy but any changes would have to conform to the planned development district and be in line with its character, he said.
The city will consider changes, as it has in other projects, on a case by case basis, Dowling said. In response to market conditions, the city has allowed developers to tweak plans to build different types of properties as long as they fit the character of the area. “This council has proven that if a quality alternative is presented they will act on it,” Dowling said, but added that they would want to make sure that it was a quality project and wouldn’t dilute the developer’s financial commitments to the city, including building new roads. A potential buyer for the property approached the city recently and wanted to buy a strip shopping center, Dowling said. The city said that requests to amend the planned development district to allow for it would be denied and that type development wouldn’t be allowed on the property, he said. “There are a lot of established neighborhoods in that area, a lot of them are around what used to be a golf course so we have to be careful about how we impact them,” he said. The former Robber’s Roost, despite any potential challenges, is an important project in a critical area in the city, Dowling said. “Ever since it was abandoned or ever since it became economically infeasible to accomplish, it’s just been a challenge to upkeep,” he said. “We would certainly like to see it developed in a quality manner.”
Lovelace said that the company has reached out to active mixed-use developers it has relationships with to tell them about the property. “We’re aware of a handful of tenants who are interested in being in the North Myrtle Beach market and were waiting for this type of location to become available,” he said. Given the current lagging economy, the development is likely to be completed in stages over time and be driven by tenant demand, Lovelace said. “Nobody is going to buy this on a speculative basis, as is with any raw land and developments occurring anywhere right now,” he said. Previous developers created a planned development district for the area and got all of the approvals from the planning commission and city council. That planned development district will now be the foundation for any future development. The city approved the plan in 2009, but the recession put the development on hold, leaving the former golf course overgrown. The development district divides the property into three specific sections: a town center, village shops and a residential community.
The goal was to create a walkable community and the town center would be a similar concept to The Market Common in Myrtle Beach, said Greg Duckworth, the founder of Environmental Concepts, LLC, which developed the plans. Duckworth is also a North Myrtle Beach city councilman. A lot of work went into studying traffic patterns and addressing the concerns and needs of the existing neighboring residential communities, Duckworth said. The town center is designed to have a movie theater, a large anchor retailer such as Kohl’s, and several smaller retail and restaurant spaces. There would be residential or office space above the stores. The town center, which is envisioned as a more urban area, would also have a central lawn area to be used for gatherings, concerts and other activities. It is one of the many green spaces in the development, which proposed several parks and planted buffer areas separating the commercial and residential areas. Nearly 20 percent of the development was slated to be kept as open space. The plan was for a few businesses right along U.S. 17 and several live-work townhomes in the town center area as well.
The village shops area would have a few stores along U.S. 17 and then a number of small shops, such as boutiques, gift stores, hair salons around a lake. The residential neighborhood was designed to have 164 single-family home lots that averaged 6,233 square feet. There would be a total 394 residential units in the three phases. “It has to be neighborhood friendly,” Duckworth said. “There is a lot of passion on all sides of this situation.” Pat Dowling, a spokesman for the City of North Myrtle Beach, said that plan in place is high quality and the city would like to stay close to its guidelines. Lovelace said that any potential buyer will know that they have to work within the zoning in place, but some changes will likely have to be made and would go through the traditional approval process. The existing plan may not be feasible in the current economy but any changes would have to conform to the planned development district and be in line with its character, he said.
The city will consider changes, as it has in other projects, on a case by case basis, Dowling said. In response to market conditions, the city has allowed developers to tweak plans to build different types of properties as long as they fit the character of the area. “This council has proven that if a quality alternative is presented they will act on it,” Dowling said, but added that they would want to make sure that it was a quality project and wouldn’t dilute the developer’s financial commitments to the city, including building new roads. A potential buyer for the property approached the city recently and wanted to buy a strip shopping center, Dowling said. The city said that requests to amend the planned development district to allow for it would be denied and that type development wouldn’t be allowed on the property, he said. “There are a lot of established neighborhoods in that area, a lot of them are around what used to be a golf course so we have to be careful about how we impact them,” he said. The former Robber’s Roost, despite any potential challenges, is an important project in a critical area in the city, Dowling said. “Ever since it was abandoned or ever since it became economically infeasible to accomplish, it’s just been a challenge to upkeep,” he said. “We would certainly like to see it developed in a quality manner.”
Hotel supply: Where are we in the cycle?
HotelNewsNow.com - In our previous columns we discussed the relationship between occupancy levels and average-daily-rate growth, and the components of demand growth. This article will link the final component of hotel performance, supply, completing our story of the hotel market cycle. Beginning in Q1 2010, demand for hotel rooms started to increase. As this new demand outpaced the change in supply, increases in occupancy led to a recovery in ADR and profit margins during the second half of the year. In Chart 1 below, the full cycle is plotted with the current year denoted by the green circle.
Chart 1: Hotel Market Cycle
Naturally, as we move up the cycle, we expect development activity to increase and eventually for new supply to enter the market. In reality, the cycle doesn’t always act according to its script. Because of the long lead-time between the initial planning, financing and construction times of hotels, we often see new supply coming into the market at inopportune stages of the cycle. Studying Chart 2, it becomes apparent supply increases sometimes come at a time when there isn’t the demand available to absorb it, which leads to deceases in occupancy.
Chart 2: U.S. Hotel Performance (Supply, Demand, Occupancy Change), 4-Quarter Moving Average
The increasing cost of land and building materials in the early-to-mid 2000s contributed to the low levels of supply growth experienced in 2004-2006 (see Chart 3 below). Many developers were tempted by the occupancy and ADR gains found in the hotel industry at the peak of the cycle in 2006-2007. Because it takes 18 months or longer to build full-service hotels, many of these properties that began construction in 2006-2007 didn’t enter the market until 2008-2010, when the industry had fallen into a deep recession.
Chart 3: Supply Change and Producer Price Index
To justify construction of a new hotel, many variables must fall in line: First, the market must have unsatisfied demand. Historically, this became apparent in larger-than-normal increases in ADR and occupancy. Prolonged occupancy increases in 1994-1995 fueled the supply gains in 1997-1999, while the strong demand in 2004-2007 stimulated a massive infusion of development and ultimately an increase of 260,000 rooms during the three-year period of 2008-2010. Second, the cost of land and raw materials must be sufficiently low. The years of 2005 and 2006 saw the lowest level of new supply growth since STR (the parent company of HotelNewsNow.com) began collecting data, yet occupancy and ADR increases were the largest of the decade. During the first half of the decade, the producer’s price index saw increases of 250% that were driven largely by oil prices and the housing boom, as Chart 3 illustrates. Note: The large increase experienced in 2008 was a result of the oil price bubble.
At PKF Hospitality Research, we spent a good part of the past 10 years fine-tuning our Hotel Horizons econometric forecasting models for hotel demand, ADR and changes in supply. Because building a hotel doesn’t happen overnight, by lagging our variables that go into the model we are able to account for the time it takes to develop and construct a new hotel. The two principal variables that compose our supply equation are occupancy and ADR. New development is triggered once these variables move beyond a certain point, which varies by market. Other variables, such as PPI, will be added when circumstances warrant, like we saw in the early to mid 2000s (Chart 3). Our current Hotel Horizons supply forecast calls for very little supply growth during the next five years. The occupancy and ADR variables from which new supply is triggered are not projected to return to levels that warrant supply additions until 2012-2013 at the earliest. Returning to Chart 1, these levels occur approximately at long-run average occupancy and equilibrium ADR—ADR combined with occupancy that provides satisfactory returns to developers and capital suppliers. This news, coupled with the 18-month development time of a hotel and a PPI forecast that remains at elevated levels, translates into small levels of new competition throughout our forecast period.
Some markets, however, are still faced with the task of absorbing large quantities of new supply. Fortunately, the markets welcoming new additions during 2011 and 2012 either saw a milder decline than most, such as Pittsburg and New Orleans, or saw a very strong rebound in 2010, for example, New York and Miami. Still, 30 of the 50 of markets that PKF-HR forecasts are projected to have supply increases of less than 1% during the next two years. On a national level, supply is not forecast to increase beyond its long-run average until 2015. We expect available rooms in the U.S. to climb 2.3% in 2015, primarily because of above average occupancy and ADR levels in 2013 and 2014. Thanks for reading along with us, we welcome comments and discussion on where you think the hotel market cycle will be heading next.
Chart 1: Hotel Market Cycle
Naturally, as we move up the cycle, we expect development activity to increase and eventually for new supply to enter the market. In reality, the cycle doesn’t always act according to its script. Because of the long lead-time between the initial planning, financing and construction times of hotels, we often see new supply coming into the market at inopportune stages of the cycle. Studying Chart 2, it becomes apparent supply increases sometimes come at a time when there isn’t the demand available to absorb it, which leads to deceases in occupancy.
Chart 2: U.S. Hotel Performance (Supply, Demand, Occupancy Change), 4-Quarter Moving Average
The increasing cost of land and building materials in the early-to-mid 2000s contributed to the low levels of supply growth experienced in 2004-2006 (see Chart 3 below). Many developers were tempted by the occupancy and ADR gains found in the hotel industry at the peak of the cycle in 2006-2007. Because it takes 18 months or longer to build full-service hotels, many of these properties that began construction in 2006-2007 didn’t enter the market until 2008-2010, when the industry had fallen into a deep recession.
Chart 3: Supply Change and Producer Price Index
To justify construction of a new hotel, many variables must fall in line: First, the market must have unsatisfied demand. Historically, this became apparent in larger-than-normal increases in ADR and occupancy. Prolonged occupancy increases in 1994-1995 fueled the supply gains in 1997-1999, while the strong demand in 2004-2007 stimulated a massive infusion of development and ultimately an increase of 260,000 rooms during the three-year period of 2008-2010. Second, the cost of land and raw materials must be sufficiently low. The years of 2005 and 2006 saw the lowest level of new supply growth since STR (the parent company of HotelNewsNow.com) began collecting data, yet occupancy and ADR increases were the largest of the decade. During the first half of the decade, the producer’s price index saw increases of 250% that were driven largely by oil prices and the housing boom, as Chart 3 illustrates. Note: The large increase experienced in 2008 was a result of the oil price bubble.
At PKF Hospitality Research, we spent a good part of the past 10 years fine-tuning our Hotel Horizons econometric forecasting models for hotel demand, ADR and changes in supply. Because building a hotel doesn’t happen overnight, by lagging our variables that go into the model we are able to account for the time it takes to develop and construct a new hotel. The two principal variables that compose our supply equation are occupancy and ADR. New development is triggered once these variables move beyond a certain point, which varies by market. Other variables, such as PPI, will be added when circumstances warrant, like we saw in the early to mid 2000s (Chart 3). Our current Hotel Horizons supply forecast calls for very little supply growth during the next five years. The occupancy and ADR variables from which new supply is triggered are not projected to return to levels that warrant supply additions until 2012-2013 at the earliest. Returning to Chart 1, these levels occur approximately at long-run average occupancy and equilibrium ADR—ADR combined with occupancy that provides satisfactory returns to developers and capital suppliers. This news, coupled with the 18-month development time of a hotel and a PPI forecast that remains at elevated levels, translates into small levels of new competition throughout our forecast period.
Some markets, however, are still faced with the task of absorbing large quantities of new supply. Fortunately, the markets welcoming new additions during 2011 and 2012 either saw a milder decline than most, such as Pittsburg and New Orleans, or saw a very strong rebound in 2010, for example, New York and Miami. Still, 30 of the 50 of markets that PKF-HR forecasts are projected to have supply increases of less than 1% during the next two years. On a national level, supply is not forecast to increase beyond its long-run average until 2015. We expect available rooms in the U.S. to climb 2.3% in 2015, primarily because of above average occupancy and ADR levels in 2013 and 2014. Thanks for reading along with us, we welcome comments and discussion on where you think the hotel market cycle will be heading next.
The Ocean 7 live-work development debuts soon in Myrtle Beach
Sun News - Ocean 7, an eight-unit live-work building on Ocean Boulevard in Myrtle Beach, should be ready for its first occupants soon. The three-story townhomes each have retail space at street level and living space on the top two floors. Construction on the property, which is being built by Ocean 7 Developers and is on the corner of Ocean Boulevard and 7th Avenue North, should be done in the next couple of weeks, said Jason Merritt, of By the Beach Properties, who is the property manager and is also helping sell the units. Four of the townhomes are already under contract, he said. A pizza restaurant is likely to move into one of the retail spaces, Merritt’s business will move into another and two others have been purchased by Beach Discount Beverage, Merritt said. The retail sections each have between 1,500 and 1,800 square feet of commercial space, while the living sections each have about 2,000 square feet of living space and between four and five bedrooms. The townhouses are going for about $649,000 each. All of the buyers are local investors and local owners and most plan to put the properties into a rental program, Merritt said. Ellis said he’s gotten several calls about leasing the commercial space and a lot of questions about renting the townhomes. There is such a large demand for the rentals, in part because of their size, that he already has a waiting list for once the building is down, he said.
Tuesday
Third time a charm for theme park in Myrtle Beach?
Sun News - The owners of the former Freestyle Music Park continue to search for a buyer or new operator as experts wonder whether the third time might be a charm for the twice-failed theme park. Attorneys for FPI US, the mortgage holder who bought back the property for $7 million during a foreclosure auction in August, have been handing out proposal guidelines to potential buyers and park operators with the goal of reopening the park off U.S. 501 in Fantasy Harbour by the summer tourism season next year. To have time to get the park ready by next summer, a new owner or operators should come on board this fall, officials said. As the search for a new operator continues, economists and theme park experts disagree on whether the theme park can succeed in the Myrtle Beach area, where tourists flock to the beaches during the day – not a theme park. Still, some are still rooting for the park to take off and say it can work if done right, which would include major changes in the way the park operated during its first two summers in 2008 and 2009 – both of which ended in bankruptcy or foreclosure. “It’s a challenge, but there’s still potential,” said John Gerner, managing director for Leisure Business Advisors, a Richmond, Va.-based firm that does feasibility and design work for theme parks and other amusements. “People in my industry, we are cheering for that park to come back.”
‘Colossal failure …’ Some say the theme park’s ride in Myrtle Beach is over. Owners have tried twice to make the park work, and neither could. The $400 million attraction debuted as Hard Rock Park in 2008 but closed after one summer and was sold out of bankruptcy in February 2009 for $25 million. FPI MB reopened it as Freestyle Music Park in May 2009, but it failed again after the summer, falling into foreclosure owing money to bands, website designers and other firms that did business with the park – payments most of them never received. It will be difficult to find investors, not only because of today’s tough economy but because of the park’s track record, said Rob Salvino, an economist at Coastal Carolina University. When a company buys a $400 million park at the bargain of $25 million and still can’t make it work, it doesn’t seem promising, he said. “And it still didn’t make it,” Salvino said. “I don’t know how you could pay less for it. “I think it would be a very high-risk investment for a group to take on,” Salvino said, adding that he doesn’t think the park can succeed even if it did find investors. “When you look at that much of a colossal failure … the likelihood is just not very good [that it would succeed].”
Attorneys for FPI say they’ve gotten several groups interested in the park – though they declined to say how many – and that “most people are still very positive about Myrtle Beach,” said Franklin Daniels, an attorney representing FPI. Despite the park’s bumpy ride, FPI is confident the park can be successful here with the right operators, he said. “They completely believe it can work and want it to work,” Daniels said. “We are in a tough economy and the park has its history. … But there are enough tourists who come here who want to be entertained. It would be a fun and interesting thing to do while you’re at the beach.” Locals and experts have speculated about what went wrong with Hard Rock Park and Freestyle. Most blame its location several miles away from the beach, high ticket prices – especially during a recession when consumers aren’t opening their wallets – and the daytime competition from the amenity that brings tourists here to begin with: the beach. “The beach is a dynamic that really makes it hard for a theme park to do well,” Gerner said. “Generally, [tourists] are already there to do something else during the day.” About 14 million tourists visit the Grand Strand each year, most of them lured by the ocean or golf. A theme park will be an activity they do after the beach – such as a Broadway at the Beach experience – and will never be the main reason vacationers come here like Disney World is in Orlando, experts say. “Will it be a destination like Carowinds or Six Flags or Mickey Mouse? Not unless Six Flags comes in,” said Horry County Councilman Gary Loftus, whose district includes the theme park. “It’s not going to be a destination. It’ll be like Broadway [at the Beach] – something to do when they get here.”
‘Off the beaten path’ Loftus and others said the theme park could have a place here if it operated like the beachside amusement parks that have done well for so many years, including Family Kingdom Amusement Park and The Myrtle Beach Pavilion Amusement Park, which closed in 2006. A key to success is crafting a business plan that fills that niche, said Mark Lazarus, a veteran amusement park operator along the Grand Strand who contacted FPI’s attorneys to express interest in working with investors to make the former Freestyle work. Lazarus also tried to buy the park out of bankruptcy after its first season as Hard Rock Park. “I still think it has potential if it is done the right way,” Lazarus said. Dropping the gate fee is one of the first steps, he said. Lazarus and others said the ticket price – starting at $40 for adults as Freestyle – was way out of reach for budget-conscious families – especially during the spending cutbacks of the recession. And unlike Disney-goers, theme park visitors here don’t want to stay the whole day recouping that cost; they are more likely to see a trip to the theme park as a way to cap the day, experts said. Experts suggest free admission, with guests paying for what they want to do while inside, such as buying a wristband for rides or a ticket to a concert. Lazarus suggested opening in midafternoon and staying open until midnight, possibly with a laser light show as a nightly feature. “If the gate is free, a lot of people will just venture in,” Lazarus said.
The park’s location is another challenge, experts say. It’s about 5 miles from the oceanfront, so tourists have to make an effort to go west of the Intracoastal Waterway instead of just strolling along the main strip or driving a couple of miles to Broadway, they said. “This place is off the beaten path a little bit,” Salvino said.
The park also needs to be more easily seen by drivers along busy U.S. 501 headed into the beach – several experts suggested demolishing the mall building. In addition, the Fantasy Harbour area itself needs some sprucing up, experts said. More rides also would make the park more appealing and give guests more to do, Lazarus said.
A summer 2012 opening - The park’s owners want to have the theme park ready to go for summer 2012. It has been closed for the past two summers as officials worked through its financial and legal woes, though a few workers stayed on to regularly run the rides and keep them in shape. They are gearing up even more now to possibly show off the park to potential buyers or operators, Daniels said. But some local leaders – even though they want to see the park reopen and be successful – aren’t sure a summer opening is in the cards. Loftus said the park can be successful with the right business plan, but said the new owners or operators should wait a couple of years until the economy has improved. “I think it could [succeed], I just don’t think the time is right,” Loftus said. “But I hate to see it just sitting there.” Theme parks across the country haven’t escaped the down economy. The industry improved some in 2010, but the verdict on the 2011 season is still out, said Colleen Mangone, a spokeswoman for the International Association of Amusement Parks and Attractions. Parks have reported mixed results, with some saying wet weather at the beginning of the 2011 season hurt attendance, while others said attendance, season pass sales and corporate outings to the parks continued to increase, she said. “We are still feeling the effects of the economy,” Gerner said. “There seems to be a feeling that things are improving. We are holding our own.” Experts said it’s too early to say how 2012 might shape up – a lot of it will depend on which way the economy goes in the next few months. Still, several parks – including Dollywood and Carowinds – are adding major, multimillion-dollar rides for 2012.
It’s unclear how long it would take to get the former Freestyle park ready to open by the summer. Freestyle owners did it in about three months, but Lazarus said it would take eight months to a year to get it ready through rebranding, marketing and adding rides. So if the park wants to open in 2012, a buyer or operator needs to be locked in soon, Lazarus said. “It needs to be happening right now,” he said. Now is a tough time to line up investors, especially considering the park’s history, Horry County Council Chairman Tom Rice said. Still, a reopened park could create much-needed jobs in Horry County, which like many other areas in the state and the country, is being hammered by double-digit unemployment rates, he said. “If I was an investor, I’d be cautious,” Rice said. “If somebody buys it, I wish them the best of luck. We sure need the jobs.” The Myrtle Beach Regional Economic Development Corp., the county-funded agency charged with luring jobs and businesses here, has talked with the park’s existing owners about state job tax credits that a new operator might qualify for, but it is not pursuing theme park operators because it is focusing on diversifying the tourism-based economy by luring aviation, marine and technology businesses, president Brad Lofton said. “I would hope somebody could make some good use of it,” Rice said.
‘Colossal failure …’ Some say the theme park’s ride in Myrtle Beach is over. Owners have tried twice to make the park work, and neither could. The $400 million attraction debuted as Hard Rock Park in 2008 but closed after one summer and was sold out of bankruptcy in February 2009 for $25 million. FPI MB reopened it as Freestyle Music Park in May 2009, but it failed again after the summer, falling into foreclosure owing money to bands, website designers and other firms that did business with the park – payments most of them never received. It will be difficult to find investors, not only because of today’s tough economy but because of the park’s track record, said Rob Salvino, an economist at Coastal Carolina University. When a company buys a $400 million park at the bargain of $25 million and still can’t make it work, it doesn’t seem promising, he said. “And it still didn’t make it,” Salvino said. “I don’t know how you could pay less for it. “I think it would be a very high-risk investment for a group to take on,” Salvino said, adding that he doesn’t think the park can succeed even if it did find investors. “When you look at that much of a colossal failure … the likelihood is just not very good [that it would succeed].”
Attorneys for FPI say they’ve gotten several groups interested in the park – though they declined to say how many – and that “most people are still very positive about Myrtle Beach,” said Franklin Daniels, an attorney representing FPI. Despite the park’s bumpy ride, FPI is confident the park can be successful here with the right operators, he said. “They completely believe it can work and want it to work,” Daniels said. “We are in a tough economy and the park has its history. … But there are enough tourists who come here who want to be entertained. It would be a fun and interesting thing to do while you’re at the beach.” Locals and experts have speculated about what went wrong with Hard Rock Park and Freestyle. Most blame its location several miles away from the beach, high ticket prices – especially during a recession when consumers aren’t opening their wallets – and the daytime competition from the amenity that brings tourists here to begin with: the beach. “The beach is a dynamic that really makes it hard for a theme park to do well,” Gerner said. “Generally, [tourists] are already there to do something else during the day.” About 14 million tourists visit the Grand Strand each year, most of them lured by the ocean or golf. A theme park will be an activity they do after the beach – such as a Broadway at the Beach experience – and will never be the main reason vacationers come here like Disney World is in Orlando, experts say. “Will it be a destination like Carowinds or Six Flags or Mickey Mouse? Not unless Six Flags comes in,” said Horry County Councilman Gary Loftus, whose district includes the theme park. “It’s not going to be a destination. It’ll be like Broadway [at the Beach] – something to do when they get here.”
‘Off the beaten path’ Loftus and others said the theme park could have a place here if it operated like the beachside amusement parks that have done well for so many years, including Family Kingdom Amusement Park and The Myrtle Beach Pavilion Amusement Park, which closed in 2006. A key to success is crafting a business plan that fills that niche, said Mark Lazarus, a veteran amusement park operator along the Grand Strand who contacted FPI’s attorneys to express interest in working with investors to make the former Freestyle work. Lazarus also tried to buy the park out of bankruptcy after its first season as Hard Rock Park. “I still think it has potential if it is done the right way,” Lazarus said. Dropping the gate fee is one of the first steps, he said. Lazarus and others said the ticket price – starting at $40 for adults as Freestyle – was way out of reach for budget-conscious families – especially during the spending cutbacks of the recession. And unlike Disney-goers, theme park visitors here don’t want to stay the whole day recouping that cost; they are more likely to see a trip to the theme park as a way to cap the day, experts said. Experts suggest free admission, with guests paying for what they want to do while inside, such as buying a wristband for rides or a ticket to a concert. Lazarus suggested opening in midafternoon and staying open until midnight, possibly with a laser light show as a nightly feature. “If the gate is free, a lot of people will just venture in,” Lazarus said.
The park’s location is another challenge, experts say. It’s about 5 miles from the oceanfront, so tourists have to make an effort to go west of the Intracoastal Waterway instead of just strolling along the main strip or driving a couple of miles to Broadway, they said. “This place is off the beaten path a little bit,” Salvino said.
The park also needs to be more easily seen by drivers along busy U.S. 501 headed into the beach – several experts suggested demolishing the mall building. In addition, the Fantasy Harbour area itself needs some sprucing up, experts said. More rides also would make the park more appealing and give guests more to do, Lazarus said.
A summer 2012 opening - The park’s owners want to have the theme park ready to go for summer 2012. It has been closed for the past two summers as officials worked through its financial and legal woes, though a few workers stayed on to regularly run the rides and keep them in shape. They are gearing up even more now to possibly show off the park to potential buyers or operators, Daniels said. But some local leaders – even though they want to see the park reopen and be successful – aren’t sure a summer opening is in the cards. Loftus said the park can be successful with the right business plan, but said the new owners or operators should wait a couple of years until the economy has improved. “I think it could [succeed], I just don’t think the time is right,” Loftus said. “But I hate to see it just sitting there.” Theme parks across the country haven’t escaped the down economy. The industry improved some in 2010, but the verdict on the 2011 season is still out, said Colleen Mangone, a spokeswoman for the International Association of Amusement Parks and Attractions. Parks have reported mixed results, with some saying wet weather at the beginning of the 2011 season hurt attendance, while others said attendance, season pass sales and corporate outings to the parks continued to increase, she said. “We are still feeling the effects of the economy,” Gerner said. “There seems to be a feeling that things are improving. We are holding our own.” Experts said it’s too early to say how 2012 might shape up – a lot of it will depend on which way the economy goes in the next few months. Still, several parks – including Dollywood and Carowinds – are adding major, multimillion-dollar rides for 2012.
It’s unclear how long it would take to get the former Freestyle park ready to open by the summer. Freestyle owners did it in about three months, but Lazarus said it would take eight months to a year to get it ready through rebranding, marketing and adding rides. So if the park wants to open in 2012, a buyer or operator needs to be locked in soon, Lazarus said. “It needs to be happening right now,” he said. Now is a tough time to line up investors, especially considering the park’s history, Horry County Council Chairman Tom Rice said. Still, a reopened park could create much-needed jobs in Horry County, which like many other areas in the state and the country, is being hammered by double-digit unemployment rates, he said. “If I was an investor, I’d be cautious,” Rice said. “If somebody buys it, I wish them the best of luck. We sure need the jobs.” The Myrtle Beach Regional Economic Development Corp., the county-funded agency charged with luring jobs and businesses here, has talked with the park’s existing owners about state job tax credits that a new operator might qualify for, but it is not pursuing theme park operators because it is focusing on diversifying the tourism-based economy by luring aviation, marine and technology businesses, president Brad Lofton said. “I would hope somebody could make some good use of it,” Rice said.
Thursday
Freestyle Music Park bought out of foreclosure
Sun News - The theme park formerly known as Freestyle Music Park might be back in business in time for summer 2012. FPI US LLC, the mortgage holder of the former park that has been closed for two years, bought the property out of foreclosure this week with a goal of reopening the theme park in Fantasy Harbour in time for next summer, its attorneys said Wednesday. “There’s a little bit of light at the end of the tunnel,” said David Slough, an attorney for FPI US. Elected leaders and business owners near the park heralded the news Wednesday, saying it could help rejuvenate an area that desperately needs it. “Any time you can take something that is dead and you can bring some life to it, it is good,” said Horry County Councilman Gary Loftus, whose district includes the theme park area. FPI US is looking for either a partner to manage and operate the park or a buyer who can purchase the park and reopen it, Slough said. Talks are in the early stages, so it’s not clear exactly when the park would open, whether it would still be called Freestyle or whether it would create a new theme. “They hope it reopens and it’s a big success,” said Franklin Daniels, an attorney for FPI US. “They don’t want to see it be a vacant theme park. They are not willing to just let it go.”
FPI US LLC, which had foreclosed on former park operators FPI MB Entertainment LLC a year ago, bought the property at the Horry County foreclosure auction Monday through a “credit bid” of $7 million. That means FPI US gets the property but doesn’t pay that amount because it’s already owed more than that by the former park operators. The total debt was $34 million, according to court records. Other businesses that were still owed money by Freestyle are out of luck. FPI US won the auction over one other bidder, Alton Swann, a real estate professional in Myrtle Beach who said during a brief telephone conversation Wednesday that he had been working on a plan to bring somebody in to take over the park. “I’d just like to see something happen to it,” he said. “It’s a shame to see it go to waste.” The 50-acre theme park has sat idle for about two years, a far cry from the hoopla that marked its first and second openings during a two-year period. The theme park, which was built for $400 million, originally was branded as Hard Rock Park and debuted in 2008. It filed for bankruptcy protection after a slow first season.
The park’s second run started early the following year when a group of investors bought it out of bankruptcy for $25 million in February 2009 and reopened it as Freestyle Music Park a few months later. It also fell into financial troubles after just one summer - a season where tourism statewide took a hit because of the lagging economy that kept many people from traveling or prompted them to cut back on their spending if they did go on vacation. The park has been closed since, riding a wave of cases in court. With the litigation behind it, the park can move forward, Daniels said. FPI plans to look at what went wrong the first two times the park operated, identify what needs to happen to make the park a success and find a buyer or good partner to manage the park, Daniels said. That means the theme, marketing and ticket prices – which some critics said were too high, especially during the tough economy – all will be reviewed, he said. Tickets for admission to Freestyle started at about $40 for adults and about $30 for children, though the park dropped them later in the summer 2009 to less than $20 for special promotions.
“Many things in the past have to be done differently,” Daniels said. “They’ve learned a lot of hard lessons, lost a lot of money. But they are committed to it.” Some business owners in the Fantasy Harbour area, off U.S. 501 at the Intracoastal Waterway, said a revived theme park could be the first step in getting the area back to where it should be. A re-opened theme park could bring more people to the area and make it look better, said Robbie Love, owner of The X Sports Center off George Bishop Parkway near the park. "Definitely, that’s a boost,” he said. “That should be a good shot in the arm for the area.” Having the park reopen might not translate into more business at the Clarion Hotel and Conference Center on Fantasy Harbour Boulevard, but it would help the look of the area, said Lori Posma, the hotel’s sales director. “That would be great,” she said. “Just the perception of the area - everybody says it looks so decrepit over here...Any action over here would be fabulous.” During the past two years, theme park operators and others have stopped by the park interested in buying some of the rides, but the investors didn’t want to sell off the park piece by piece, still optimistic that the theme park could eventually work in Myrtle Beach, Daniels said. A small crew has continued to work at the park, including an engineer who regularly runs the rides to keep them in shape, Daniels said.
“You start selling off the rides, you destroy the value of the theme park,” he said. “They truly are committed. They want to see it reopen. They want to see it work.” But they’ve learned lessons from the park’s back-to-back failures, Daniels said. Loftus said a theme park can work in the Myrtle Beach area if it’s done right. "There were many issues that kind of led to the demise of the first two. Obviously, there were a heckuva lot more that went wrong than right,” Loftus said. “Done correctly, and with the right marketing, it should have a chance.” One culprit that hampered the park’s second run was the Great Recession, which led to an 8 percent drop in tourism in South Carolina in 2009, according to figures released this week by the S.C. Parks, Recreation and Tourism department. Tourism throughout the state generated $14 billion in 2009, down about $1 billion from the previous year. Tourism officials have said the industry has picked up since then. FPI’s talks with potential managers or buyers are in the early stages, and it’s unclear when FPI would announce details of a reopening. It probably would take between six and nine months to adequately prepare the park and promote it, though Freestyle owners did it in three months after they bought the park out of bankruptcy. “There’s no timeframe,” Daniels said. “They are working hard.” Posma of the Clarion hotel, like Loftus, said a theme park could be successful here. “If they take input they have learned and apply it, commit to it, I think they can make it work,” she said. “I’m hoping for the best.”
FPI US LLC, which had foreclosed on former park operators FPI MB Entertainment LLC a year ago, bought the property at the Horry County foreclosure auction Monday through a “credit bid” of $7 million. That means FPI US gets the property but doesn’t pay that amount because it’s already owed more than that by the former park operators. The total debt was $34 million, according to court records. Other businesses that were still owed money by Freestyle are out of luck. FPI US won the auction over one other bidder, Alton Swann, a real estate professional in Myrtle Beach who said during a brief telephone conversation Wednesday that he had been working on a plan to bring somebody in to take over the park. “I’d just like to see something happen to it,” he said. “It’s a shame to see it go to waste.” The 50-acre theme park has sat idle for about two years, a far cry from the hoopla that marked its first and second openings during a two-year period. The theme park, which was built for $400 million, originally was branded as Hard Rock Park and debuted in 2008. It filed for bankruptcy protection after a slow first season.
The park’s second run started early the following year when a group of investors bought it out of bankruptcy for $25 million in February 2009 and reopened it as Freestyle Music Park a few months later. It also fell into financial troubles after just one summer - a season where tourism statewide took a hit because of the lagging economy that kept many people from traveling or prompted them to cut back on their spending if they did go on vacation. The park has been closed since, riding a wave of cases in court. With the litigation behind it, the park can move forward, Daniels said. FPI plans to look at what went wrong the first two times the park operated, identify what needs to happen to make the park a success and find a buyer or good partner to manage the park, Daniels said. That means the theme, marketing and ticket prices – which some critics said were too high, especially during the tough economy – all will be reviewed, he said. Tickets for admission to Freestyle started at about $40 for adults and about $30 for children, though the park dropped them later in the summer 2009 to less than $20 for special promotions.
“Many things in the past have to be done differently,” Daniels said. “They’ve learned a lot of hard lessons, lost a lot of money. But they are committed to it.” Some business owners in the Fantasy Harbour area, off U.S. 501 at the Intracoastal Waterway, said a revived theme park could be the first step in getting the area back to where it should be. A re-opened theme park could bring more people to the area and make it look better, said Robbie Love, owner of The X Sports Center off George Bishop Parkway near the park. "Definitely, that’s a boost,” he said. “That should be a good shot in the arm for the area.” Having the park reopen might not translate into more business at the Clarion Hotel and Conference Center on Fantasy Harbour Boulevard, but it would help the look of the area, said Lori Posma, the hotel’s sales director. “That would be great,” she said. “Just the perception of the area - everybody says it looks so decrepit over here...Any action over here would be fabulous.” During the past two years, theme park operators and others have stopped by the park interested in buying some of the rides, but the investors didn’t want to sell off the park piece by piece, still optimistic that the theme park could eventually work in Myrtle Beach, Daniels said. A small crew has continued to work at the park, including an engineer who regularly runs the rides to keep them in shape, Daniels said.
“You start selling off the rides, you destroy the value of the theme park,” he said. “They truly are committed. They want to see it reopen. They want to see it work.” But they’ve learned lessons from the park’s back-to-back failures, Daniels said. Loftus said a theme park can work in the Myrtle Beach area if it’s done right. "There were many issues that kind of led to the demise of the first two. Obviously, there were a heckuva lot more that went wrong than right,” Loftus said. “Done correctly, and with the right marketing, it should have a chance.” One culprit that hampered the park’s second run was the Great Recession, which led to an 8 percent drop in tourism in South Carolina in 2009, according to figures released this week by the S.C. Parks, Recreation and Tourism department. Tourism throughout the state generated $14 billion in 2009, down about $1 billion from the previous year. Tourism officials have said the industry has picked up since then. FPI’s talks with potential managers or buyers are in the early stages, and it’s unclear when FPI would announce details of a reopening. It probably would take between six and nine months to adequately prepare the park and promote it, though Freestyle owners did it in three months after they bought the park out of bankruptcy. “There’s no timeframe,” Daniels said. “They are working hard.” Posma of the Clarion hotel, like Loftus, said a theme park could be successful here. “If they take input they have learned and apply it, commit to it, I think they can make it work,” she said. “I’m hoping for the best.”
Wednesday
Merger to create Myrtle Beach Golf Goliath
Sun News - The two largest golf course ownership and management companies on the Grand Strand are merging, creating one of the 15 largest course management companies in the nation and a juggernaut in the area golf market. Burroughs & Chapin Golf Management and Myrtle Beach National Company have signed a letter of intent to combine their golf assets and become equal partners in a new company that has yet to be named. Myrtle Beach National currently owns 10 of the 14 courses it manages, while B&C Golf Management, a subsidiary of Burroughs & Chapin Company Inc., owns five of the 10 courses it manages. “We believe with the strength of this new venture that represents the best of both companies, it will give us some growth opportunities and give us a greater opportunity to get the message out about the golf offerings Myrtle Beach has,” said Jim Apple, B&C president and chief executive officer. MBN Chief Executive Officer Matthew Brittain said due diligence still has to be done and the merger may not be consummated for “a couple months.” Though both companies own other entities in the golf industry, including hotels and golf package companies, the merger only involves courses.
The Members Club at Grande Dunes, the only private club owned by either company, will continue to be owned by Burroughs & Chapin. Apple said initial plans call for the new company to manage the six-year-old layout so it is involved in the 24-course merger. The merger accounts for 23 of the approximate 90 public courses stretching the coastline from Andrews to Southport, N.C., and they are at 20 facilities, with Myrtle Beach National Golf Club, Myrtlewood Golf Club and Grande Dunes featuring multiple courses. In addition, three of Myrtle Beach National’s courses are 27 holes. “We do some things well and they do some things well and we’ll pick the best practices of both companies,” Brittain said. According to a Golf Inc. magazine study of golf course management companies, the new company will be positioned at No. 15 nationally and No. 19 internationally. The other top-15 U.S. companies in the market are No. 9 Arnold Palmer Golf Management, which owns and operates five former Legends Group courses, and No. 1 Troon Golf, which operates four courses at St. James Plantation in Southport. N.C. The second largest golf course management company on the Strand is Signature Golf Group with six 18-hole Strand courses and nine total courses, so the new company will dwarf its competitors within the market. “It’s a very powerful connection, no doubt about that,” said Tim Tilma, general manager of the 27-hole stand-alone Sandpiper Bay Golf Club in Sunset Beach, N.C., which is a marketing partner with MBN and does business with both companies in lodging and golf packages. “It creates a powerful synergy between those two companies, and let’s see where it takes us.”
Combining the courses with the lodging and package businesses MBN and B&C are involved with, the new company will have the ability to influence a large portion of the golf market. “I hope our relationship with Myrtle Beach National and the volume of business we do with them doesn’t change, but only time will tell,” said Classic Golf Group general manager Tommy Smothers, whose company manages four Strand courses.
All 24 courses in the merger are on the Strand – only Farmstead Golf Links, with holes on both sides of the Carolinas border, is in North Carolina – but the new company may expand outside the area. “It doesn’t have to be limited to Myrtle Beach,” Brittain said. “I think we’re looking for opportunities outside the market.” The executive hierarchy and number of employees in the company have yet to be established. “I think we’re going to identify the positions and fill them,” Brittain said. Brittain and Apple said they believe the merger will benefit the market, because without each other to compete against, the new company is more likely to market the destination rather than engage in price wars in local media. “We do think it’s good for Myrtle Beach and not just for us,” Brittain said. “It’s two companies that believe in advertising and advertising out of the market. We believe Myrtle Beach golf is about choice. … “I think we’re taking two companies out of fighting for the local and making them more marketing oriented.” The merger has the potential to create price stability in a market that has dropped prices nearly across the board since Arnold Palmer Golf Management decreased prices considerably at the properties it took over a couple of years ago. "For a group of properties of that size and importance in the community, if [B&C is] looking for a buyer or merger, what better than to do it with a company with a long-term vested interest in the community,” said Bill Golden, president of marketing cooperative Myrtle Beach Golf Holiday. “With that comes stability and commitment. … “For the smaller guy – the stand-alone company and smaller management company – it’s competitive regardless. It’s already hard for the small guy and hard for everybody. We have to focus on getting golfers to Myrtle Beach.”
•Burroughs & Chapin courses
Owned and managed
Myrtlewood PineHills
Myrtlewood Palmetto
Pine Lakes Country Club
Grande Dunes Resort Course
Members Club at Grande Dunes (private)
Managed
Tidewater Plantation & Golf
River Hills Golf & Country Club
Arcadian Shores Golf Club
Farmstead Golf Links
Meadowlands Golf Club
Myrtle Beach National courses
Owned and managed
MBN King’s North
MBN Southcreek
MBN West
Aberdeen Country Club
Long Bay Club
Waterway Hills Golf Club
River Club
Litchfield Country Club
Willbrook Plantation
Pawleys Plantation
Managed
Blackmoor Golf Club
Wild Wing Plantation
Tradition Club
Wachesaw Plantation East
Top 20 golf course management companies
(According to Golf Inc. magazine)
Place; company; headquarters; 18-hole equivalent courses
1; Troon Golf; Scottsdale, Ariz.; 209.5
2; Pacific Golf Management; Tokyo, Japan; 157.5
3; Accordia Golf; Tokyo, Japan; 138
4; Billy Casper Golf; Vienna, Va.; 131
5; ClubCorp; Dallas, Texas; 128
6; American Golf; Santa Monica, Calif.; 109
7; KemperSports; Northbrook, Ill.; 107
8; Eagle Golf; Dallas, Texas; 77
9; Arnold Palmer Golf Management; Addison, Texas; 65
10; Marriott Golf; Orlando, Fla.; 62.5
11; Canongate/Sequoia Golf; Atlanta, Ga.; 58.5
12; ClubLink; Ontario, Canada; 50.5
13; OB Sports; Scottsdale, Ariz.; 42
14; Crown Golf; Binfield, UK; 39
15; Lindsay Management; Fayetteville, Ark.; 32.5
16; SunBelt Golf Corp.; Birmingham, Ala.; 26
16; Heritage Golf Group; San Diego, Calif.; 26
16; Landscapes Golf Group; Lincoln, Neb.; 26
19; B&C-MBN merger; Myrtle Beach; 24
20; Touchstone Golf; Burnet, Texas; 21.5
The Members Club at Grande Dunes, the only private club owned by either company, will continue to be owned by Burroughs & Chapin. Apple said initial plans call for the new company to manage the six-year-old layout so it is involved in the 24-course merger. The merger accounts for 23 of the approximate 90 public courses stretching the coastline from Andrews to Southport, N.C., and they are at 20 facilities, with Myrtle Beach National Golf Club, Myrtlewood Golf Club and Grande Dunes featuring multiple courses. In addition, three of Myrtle Beach National’s courses are 27 holes. “We do some things well and they do some things well and we’ll pick the best practices of both companies,” Brittain said. According to a Golf Inc. magazine study of golf course management companies, the new company will be positioned at No. 15 nationally and No. 19 internationally. The other top-15 U.S. companies in the market are No. 9 Arnold Palmer Golf Management, which owns and operates five former Legends Group courses, and No. 1 Troon Golf, which operates four courses at St. James Plantation in Southport. N.C. The second largest golf course management company on the Strand is Signature Golf Group with six 18-hole Strand courses and nine total courses, so the new company will dwarf its competitors within the market. “It’s a very powerful connection, no doubt about that,” said Tim Tilma, general manager of the 27-hole stand-alone Sandpiper Bay Golf Club in Sunset Beach, N.C., which is a marketing partner with MBN and does business with both companies in lodging and golf packages. “It creates a powerful synergy between those two companies, and let’s see where it takes us.”
Combining the courses with the lodging and package businesses MBN and B&C are involved with, the new company will have the ability to influence a large portion of the golf market. “I hope our relationship with Myrtle Beach National and the volume of business we do with them doesn’t change, but only time will tell,” said Classic Golf Group general manager Tommy Smothers, whose company manages four Strand courses.
All 24 courses in the merger are on the Strand – only Farmstead Golf Links, with holes on both sides of the Carolinas border, is in North Carolina – but the new company may expand outside the area. “It doesn’t have to be limited to Myrtle Beach,” Brittain said. “I think we’re looking for opportunities outside the market.” The executive hierarchy and number of employees in the company have yet to be established. “I think we’re going to identify the positions and fill them,” Brittain said. Brittain and Apple said they believe the merger will benefit the market, because without each other to compete against, the new company is more likely to market the destination rather than engage in price wars in local media. “We do think it’s good for Myrtle Beach and not just for us,” Brittain said. “It’s two companies that believe in advertising and advertising out of the market. We believe Myrtle Beach golf is about choice. … “I think we’re taking two companies out of fighting for the local and making them more marketing oriented.” The merger has the potential to create price stability in a market that has dropped prices nearly across the board since Arnold Palmer Golf Management decreased prices considerably at the properties it took over a couple of years ago. "For a group of properties of that size and importance in the community, if [B&C is] looking for a buyer or merger, what better than to do it with a company with a long-term vested interest in the community,” said Bill Golden, president of marketing cooperative Myrtle Beach Golf Holiday. “With that comes stability and commitment. … “For the smaller guy – the stand-alone company and smaller management company – it’s competitive regardless. It’s already hard for the small guy and hard for everybody. We have to focus on getting golfers to Myrtle Beach.”
•Burroughs & Chapin courses
Owned and managed
Myrtlewood PineHills
Myrtlewood Palmetto
Pine Lakes Country Club
Grande Dunes Resort Course
Members Club at Grande Dunes (private)
Managed
Tidewater Plantation & Golf
River Hills Golf & Country Club
Arcadian Shores Golf Club
Farmstead Golf Links
Meadowlands Golf Club
Myrtle Beach National courses
Owned and managed
MBN King’s North
MBN Southcreek
MBN West
Aberdeen Country Club
Long Bay Club
Waterway Hills Golf Club
River Club
Litchfield Country Club
Willbrook Plantation
Pawleys Plantation
Managed
Blackmoor Golf Club
Wild Wing Plantation
Tradition Club
Wachesaw Plantation East
Top 20 golf course management companies
(According to Golf Inc. magazine)
Place; company; headquarters; 18-hole equivalent courses
1; Troon Golf; Scottsdale, Ariz.; 209.5
2; Pacific Golf Management; Tokyo, Japan; 157.5
3; Accordia Golf; Tokyo, Japan; 138
4; Billy Casper Golf; Vienna, Va.; 131
5; ClubCorp; Dallas, Texas; 128
6; American Golf; Santa Monica, Calif.; 109
7; KemperSports; Northbrook, Ill.; 107
8; Eagle Golf; Dallas, Texas; 77
9; Arnold Palmer Golf Management; Addison, Texas; 65
10; Marriott Golf; Orlando, Fla.; 62.5
11; Canongate/Sequoia Golf; Atlanta, Ga.; 58.5
12; ClubLink; Ontario, Canada; 50.5
13; OB Sports; Scottsdale, Ariz.; 42
14; Crown Golf; Binfield, UK; 39
15; Lindsay Management; Fayetteville, Ark.; 32.5
16; SunBelt Golf Corp.; Birmingham, Ala.; 26
16; Heritage Golf Group; San Diego, Calif.; 26
16; Landscapes Golf Group; Lincoln, Neb.; 26
19; B&C-MBN merger; Myrtle Beach; 24
20; Touchstone Golf; Burnet, Texas; 21.5
Grand Strand single-family home market stable, condo prices still dropping
Sun News - Real estate data released today shows that the single-family home market has stabilized, but the condo market is still navigating a bumpy road, according to local Realtors. Single-family home sales were down about 16 percent in June, when compared to the same month last year, according to the Multiple Listing Service. But for April through June sales were down only about 3 percent from the same period in 2010. The median single-family home price was up 3 percent in June, to $169.450, when compared to the same month last year, according to the MLS. The three-months between April and June had a 4 percent drop in median price, to $162,500, when compared to the same period last year, according to the MLS. "The single-family home market has stabilized," said Tom Maeser, a real estate analyst with the Coastal Carolinas Association of Realtors. "There have been enough months of consistency without big swings." The condo market, by contrast, has continued to have more sales than last year, but also has had continually dropping prices. Foreclosures and short sales are driving down prices in the condo market and appealing to buyers who are more interested in lower-priced properties, Maeser said. Many of the lower-priced single-family homes have already sold, so sales have slowed in that part of the market while they have continued in the condo market, he said. Condo sales were up 3 percent in June when compared to the same month last year, according to the MLS. Condo sales were up 6 percent between April and June, when compared to the same period last year, according to the MLS. The median condo price last month was down 5 percent from June 2010, to $118,900, according to the MLS. The median condo price between April and June was down 12 percent, to $108,000, compared to the same period in 2010, according to the MLS. Marvin Heyd, the owner of Prudential Myrtle Beach Real Estate, said he is confident the market has stabilized. "I know regardless of what the numbers are saying we are extremely busy," he said. "We have a lot of contracts being written and a lot of people coming in and looking at property and its going to feed right into the fall market."
Monday
Investor Survey: Optimism Rising As CRE Recovery Slowly Gains Traction
CoStar - Cap Rates Expected to Hold Steady Or Decline in Most U.S. Markets Over Next Six Months According to PwC Survey Respondents. Investors are growing more confident that the commercial real estate industry is moving past the bottom of the cycle as the economy adds jobs and property fundamentals slowly improve, according to the results of the first-quarter 2011 PwC Real Estate Investor Survey. Tracking the expectations of survey respondents for the future performance of the office, retail, industrial and multifamily property sectors from 2011 to 2014, PricewaterhouseCoopers found that investors have a sense that, although real estate is recovering, the pace of the recovery in the U.S. economy has been slow and uneven at best.
As investors become more confident about the long-awaited recovery in occupancy, sales and leasing, however, they're eager to get deals done, noted Mitch Roschelle, partner and PwC U.S. real estate advisory practice leader. "This bodes well for the industry as the volume of capital chasing deals is expected to increase in all sectors as investors work to deploy capital before interest rates rise, overall cap rates increase and the industry shifts more in favor of sellers," Roschelle said. PwC analyzed historical and forecasting data to measure how the inventory of each sector changes over time in relation to the four stages of the real estate cycle, contraction, expansion, recession and recovery. The report surveyed 31 markets, including 10 national markets; and individual product types including regional mall, power center, strip shopping center, CBD office, suburban office, flex/R&D, warehouse, apartment, net lease, and medical office buildings. The report also includes a review of 18 major U.S. office markets and three regional apartment markets, Mid-Atlantic, Pacific, and Southeast.
The report finds that average overall cap rates decreased in 27 of the 31 surveyed markets as signs of recovery emerged for both the economy and the real estate industry. Investors reported the largest quarterly decreases in the regional apartment markets, where average cap rates compressed between 39 and 73 basis points in the first quarter. Cap rate compression continues in sales involving well-located and better-positioned assets with stable rent rolls and limited leasing risk, and an increasing number of investors are expanding their property searches to include secondary markets and impaired assets, the survey found. Due to strong buyer interest combined with increased debt market liquidity, investors expect that overall cap rates will either hold steady or decline in 25 of the survey's 31 markets over the next six months.
The results of the PricewaterhouseCoopers survey corroborate recent analysis by CoStar Group, which publishes a monthly index tracking repeat sales of investment-grade commercial properties. The index jumped 10.6% in January over the same period last year, the largest year-over-year gain since the height of the real estate boom in 2006. The increase in the index for higher-quality properties hit a five-year high in January despite dipping slightly from December, a reflection of how strongly the index has recovered within 12 months. First-quarter CoStar outlooks for the office, multifamily, industrial and retail sectors also showed improving fundamentals in investment sales and leasing activity. Below are PwC survey findings relative to the major property types:
Office - Most of the nation's office inventory will be in recovery by year-end 2011 due to a lack of new supply and signs of falling vacancy for the U.S. office market. Recovery is in sight, with more than 86% of the U.S. office sector passing over the market bottom by year-end 2012. That said, office markets such as Chicago, Las Vegas, Los Angeles and Tampa are expected to remain in recession through 2012.
Retail - Spotty consumer spending and inflation fears will keep the majority of retail inventory, 76.6%, in recession through 2012. A recovery by year-end 2013 will include 77% of retail inventory. Individual retail markets expected to perform better than the overall sector include Long Island, Nashville, and Fairfield County, which are each expected to be in recovery during 2012.
Industrial - Availability rates for the U.S. industrial property are expected to peak in 2011 as tenant demand strengthens in a growing economy. Most industrial stock will be in recovery in 2011 and 2012, nearly 72 and 86.2%, respectively. Rising imports and exports will send a larger portion of industrial inventory into expansion phase in 2013 and 2014 (20.9% and 40.6%) Individual markets that are expected to underperform the sector include Tampa, FL; Akron, OH, Cleveland, and Minneapolis.
Apartments - U.S. multifamily leads the other three sectors handily in terms of recovery. As tighter loan restrictions continue to dampen single-family home-buying, pent-up housing demand will grow the proportion of multifamily stock in the expansion phase through 2014, when it hits 30.2%. Two multifamily markets, New Orleans and Syracuse, NY, aren't expected to enter expansion over the near term.
As investors become more confident about the long-awaited recovery in occupancy, sales and leasing, however, they're eager to get deals done, noted Mitch Roschelle, partner and PwC U.S. real estate advisory practice leader. "This bodes well for the industry as the volume of capital chasing deals is expected to increase in all sectors as investors work to deploy capital before interest rates rise, overall cap rates increase and the industry shifts more in favor of sellers," Roschelle said. PwC analyzed historical and forecasting data to measure how the inventory of each sector changes over time in relation to the four stages of the real estate cycle, contraction, expansion, recession and recovery. The report surveyed 31 markets, including 10 national markets; and individual product types including regional mall, power center, strip shopping center, CBD office, suburban office, flex/R&D, warehouse, apartment, net lease, and medical office buildings. The report also includes a review of 18 major U.S. office markets and three regional apartment markets, Mid-Atlantic, Pacific, and Southeast.
The report finds that average overall cap rates decreased in 27 of the 31 surveyed markets as signs of recovery emerged for both the economy and the real estate industry. Investors reported the largest quarterly decreases in the regional apartment markets, where average cap rates compressed between 39 and 73 basis points in the first quarter. Cap rate compression continues in sales involving well-located and better-positioned assets with stable rent rolls and limited leasing risk, and an increasing number of investors are expanding their property searches to include secondary markets and impaired assets, the survey found. Due to strong buyer interest combined with increased debt market liquidity, investors expect that overall cap rates will either hold steady or decline in 25 of the survey's 31 markets over the next six months.
The results of the PricewaterhouseCoopers survey corroborate recent analysis by CoStar Group, which publishes a monthly index tracking repeat sales of investment-grade commercial properties. The index jumped 10.6% in January over the same period last year, the largest year-over-year gain since the height of the real estate boom in 2006. The increase in the index for higher-quality properties hit a five-year high in January despite dipping slightly from December, a reflection of how strongly the index has recovered within 12 months. First-quarter CoStar outlooks for the office, multifamily, industrial and retail sectors also showed improving fundamentals in investment sales and leasing activity. Below are PwC survey findings relative to the major property types:
Office - Most of the nation's office inventory will be in recovery by year-end 2011 due to a lack of new supply and signs of falling vacancy for the U.S. office market. Recovery is in sight, with more than 86% of the U.S. office sector passing over the market bottom by year-end 2012. That said, office markets such as Chicago, Las Vegas, Los Angeles and Tampa are expected to remain in recession through 2012.
Retail - Spotty consumer spending and inflation fears will keep the majority of retail inventory, 76.6%, in recession through 2012. A recovery by year-end 2013 will include 77% of retail inventory. Individual retail markets expected to perform better than the overall sector include Long Island, Nashville, and Fairfield County, which are each expected to be in recovery during 2012.
Industrial - Availability rates for the U.S. industrial property are expected to peak in 2011 as tenant demand strengthens in a growing economy. Most industrial stock will be in recovery in 2011 and 2012, nearly 72 and 86.2%, respectively. Rising imports and exports will send a larger portion of industrial inventory into expansion phase in 2013 and 2014 (20.9% and 40.6%) Individual markets that are expected to underperform the sector include Tampa, FL; Akron, OH, Cleveland, and Minneapolis.
Apartments - U.S. multifamily leads the other three sectors handily in terms of recovery. As tighter loan restrictions continue to dampen single-family home-buying, pent-up housing demand will grow the proportion of multifamily stock in the expansion phase through 2014, when it hits 30.2%. Two multifamily markets, New Orleans and Syracuse, NY, aren't expected to enter expansion over the near term.
Proposal cuts back corridor powers, Skyway among projects that could be affected
Star News - Proposed legislation in the state Senate would limit the time the government can prevent development on private land in the path of a planned road. Senate Bill 214 would require governments protecting properties from development to purchase them or begin condemnation proceedings within 18 months from the time a corridor protection map is filed. If the government that filed the map doesn't do so, the property owner would be free to develop the land, according to the bill. Under current law, no building permits or subdivision approvals may be issued inside a protected corridor for up to three years, or 36 months, from the date an application was submitted by a developer.
The statewide bill – sponsored by Sens. Thom Goolsby of New Hanover County, Bill Rabon of Brunswick
County and Clark Jenkins of Edgecombe County – ultimately could impact countless property owners in the paths of future roads across the state, including local highways such as the Cape Fear Skyway and the Hampstead Bypass. Under state law, local governments, the state Board of Transportation and the N.C. Turnpike Authority can adopt corridor protection maps to keep property owners from developing land in a planned road's footprint. The idea in part is to protect taxpayers by keeping down the value of properties that the N.C. Department of Transportation will have to purchase for new roads.
The Senate bill also would change the "trigger" starting the time period from the application submittal date to the filing date of the corridor map. Critics of the existing law say it infringes on personal property rights by preventing owners from doing anything with their land for three years. The Business Alliance for a Sound Economy, which deals with legislative affairs for the coastal North Carolina real estate and building industries, and the N.C. Home Builders Association are pushing the legislation. It would take effect Dec. 1 and apply only to corridor maps filed after that date. Donna Girardot, BASE chief executive officer, said under current law, to get the three-year clock started, a developer must spend the time and money to submit a development application, even though he knows it will be denied.
Girardot cited several Wilmington-area cases where property has been tied up for more than a decade while the DOT finalizes corridor protection maps and moves forward with land acquisition and construction. "In the meantime, these properties are encumbered, which complicates sales, building and potential development," she said. Greer Beaty, a DOT spokeswoman, said the department's legal staff hadn't yet reviewed the legislation, so she couldn't comment on it. But, she said, by protecting corridors, the DOT is able to keep the price of new roads down. And preventing development of new homes or businesses inside those corridors also reduces the number of people impacted by new road construction.
Mike Kozlosky, executive director of the Wilmington Metropolitan Planning Organization, which plans transportation projects, said at first glance, it appears the bill could significantly impact transportation planning and increase the costs of developing roads. It also could necessitate a change in the way the DOT funds road projects because right-of-way acquisition would have to be completed sooner, he said. Girardot said that the construction of new roads is vitally important to the economy of the Wilmington area but that private property owners' rights also must be considered as the state struggles to find enough money to pay for property acquisition in a timely manner. "Requiring them to file an expensive request for development, in order to have it denied and then waiting sometimes many years while continuing to pay property taxes on land that they cannot sell, develop or otherwise utilize due to state budget shortfalls is also not right," she said.
The statewide bill – sponsored by Sens. Thom Goolsby of New Hanover County, Bill Rabon of Brunswick
County and Clark Jenkins of Edgecombe County – ultimately could impact countless property owners in the paths of future roads across the state, including local highways such as the Cape Fear Skyway and the Hampstead Bypass. Under state law, local governments, the state Board of Transportation and the N.C. Turnpike Authority can adopt corridor protection maps to keep property owners from developing land in a planned road's footprint. The idea in part is to protect taxpayers by keeping down the value of properties that the N.C. Department of Transportation will have to purchase for new roads.
The Senate bill also would change the "trigger" starting the time period from the application submittal date to the filing date of the corridor map. Critics of the existing law say it infringes on personal property rights by preventing owners from doing anything with their land for three years. The Business Alliance for a Sound Economy, which deals with legislative affairs for the coastal North Carolina real estate and building industries, and the N.C. Home Builders Association are pushing the legislation. It would take effect Dec. 1 and apply only to corridor maps filed after that date. Donna Girardot, BASE chief executive officer, said under current law, to get the three-year clock started, a developer must spend the time and money to submit a development application, even though he knows it will be denied.
Girardot cited several Wilmington-area cases where property has been tied up for more than a decade while the DOT finalizes corridor protection maps and moves forward with land acquisition and construction. "In the meantime, these properties are encumbered, which complicates sales, building and potential development," she said. Greer Beaty, a DOT spokeswoman, said the department's legal staff hadn't yet reviewed the legislation, so she couldn't comment on it. But, she said, by protecting corridors, the DOT is able to keep the price of new roads down. And preventing development of new homes or businesses inside those corridors also reduces the number of people impacted by new road construction.
Mike Kozlosky, executive director of the Wilmington Metropolitan Planning Organization, which plans transportation projects, said at first glance, it appears the bill could significantly impact transportation planning and increase the costs of developing roads. It also could necessitate a change in the way the DOT funds road projects because right-of-way acquisition would have to be completed sooner, he said. Girardot said that the construction of new roads is vitally important to the economy of the Wilmington area but that private property owners' rights also must be considered as the state struggles to find enough money to pay for property acquisition in a timely manner. "Requiring them to file an expensive request for development, in order to have it denied and then waiting sometimes many years while continuing to pay property taxes on land that they cannot sell, develop or otherwise utilize due to state budget shortfalls is also not right," she said.
U.S. 17 Bypass to be completed two years early
Star News - Gov. Bev Perdue announced Friday afternoon that the final stretch of the U.S. 17 Wilmington Bypass would be completed in 2018, about two years earlier than expectedIn a phone interview, Perdue cited recently released population figures that showed New Hanover and Brunswick counties continuing to grow. She said both counties are “red hot” and the growing number of people exacerbates the need for better roads. “This is the right thing to do for jobs and the future of Wilmington,” the governor said. Perdue announced that several urban loop projects in the state scheduled to begin between 2014 and 2019 would begin earlier. She attributed the accelerated schedule mainly to available cash and cost savings from a favorable construction environment.
All grading and structures work on the “B” section of the U.S. 17 bypass – from U.S. 74/76 in Brunswick County to U.S. 421 in New Hanover County – would be consolidated into one contract in 2013, according to a news release from the governor's office. Paving would be done under a separate contract in 2017, allowing the project to be finished by 2018, roughly two years earlier than previously projected. “This is great news for mobility in this region,” said Mike Kozlosky, executive director of the Wilmington Metropolitan Planning Organization, a transportation planning agency. When finished, the bypass will stretch from U.S. 17 in northern New Hanover County to U.S. 17 in Brunswick County.The “A” section of the bypass – from U.S. 17 to U.S. 74/76 in Brunswick County – is expected to be open to traffic in 2013, Kozlosky said. That will leave a hole between U.S. 74/76 in Brunswick and U.S. 421 in New Hanover until that final stretch opens.
The acceleration of bypass construction has been endorsed by municipalities throughout Brunswick and New Hanover counties. The highway has been the top priority for regional transportation planners for more than a decade. “This project's been in the pipeline for a long time,” Kozlosky said. Perdue also announced that other urban loop projects would be expedited, including the widening of Interstate 485 in Charlotte and urban loops around Greensboro. According to the news release, the money to accelerate the projects was made available in three ways: By using the design/build method, which allows design and construction to take place simultaneously, and coordinating construction on three separate projects in the Charlotte area, the N.C. Department of Transportation saved about $130 million.
By saving nearly 20 percent on construction contract bids during the past year. By putting loop projects on hold last year, allowing cash to build up. Perdue also said she hoped a special fund she created for transportation projects – known as the Mobility Fund – would help build the Cape Fear Skyway during her second term as governor. Of course, she still must win a second, four-year term in 2012. The proposed Skyway would connect Brunswick and New Hanover counties with a 9.5-mile toll road and high-rise bridge across the Cape Fear River. “I want the Cape Fear Skyway to happen while I'm governor,” she said.
All grading and structures work on the “B” section of the U.S. 17 bypass – from U.S. 74/76 in Brunswick County to U.S. 421 in New Hanover County – would be consolidated into one contract in 2013, according to a news release from the governor's office. Paving would be done under a separate contract in 2017, allowing the project to be finished by 2018, roughly two years earlier than previously projected. “This is great news for mobility in this region,” said Mike Kozlosky, executive director of the Wilmington Metropolitan Planning Organization, a transportation planning agency. When finished, the bypass will stretch from U.S. 17 in northern New Hanover County to U.S. 17 in Brunswick County.The “A” section of the bypass – from U.S. 17 to U.S. 74/76 in Brunswick County – is expected to be open to traffic in 2013, Kozlosky said. That will leave a hole between U.S. 74/76 in Brunswick and U.S. 421 in New Hanover until that final stretch opens.
The acceleration of bypass construction has been endorsed by municipalities throughout Brunswick and New Hanover counties. The highway has been the top priority for regional transportation planners for more than a decade. “This project's been in the pipeline for a long time,” Kozlosky said. Perdue also announced that other urban loop projects would be expedited, including the widening of Interstate 485 in Charlotte and urban loops around Greensboro. According to the news release, the money to accelerate the projects was made available in three ways: By using the design/build method, which allows design and construction to take place simultaneously, and coordinating construction on three separate projects in the Charlotte area, the N.C. Department of Transportation saved about $130 million.
By saving nearly 20 percent on construction contract bids during the past year. By putting loop projects on hold last year, allowing cash to build up. Perdue also said she hoped a special fund she created for transportation projects – known as the Mobility Fund – would help build the Cape Fear Skyway during her second term as governor. Of course, she still must win a second, four-year term in 2012. The proposed Skyway would connect Brunswick and New Hanover counties with a 9.5-mile toll road and high-rise bridge across the Cape Fear River. “I want the Cape Fear Skyway to happen while I'm governor,” she said.
Target to evaluate Brunswick sites in 2014
Star News - Target is expected to set its sights on Brunswick County in 2014, a representative of the company told the county’s economic development officer. The retailer plans to begin evaluating possible locations that year, said Jim Bradshaw, Brunswick County Economic Development Commission executive director, in an e-mail. Bradshaw went to the International Council of Shopping Centers conference in Charlotte last week, where he met with a number of chain store representatives. Food Lion is set to begin engineering work on its planned new store in Supply, and is slated to begin construction next year, Bradshaw said. It will be built behind the Hardee’s at the intersection of U.S. 17 and N.C. 211. McDonald’s has also decided to build a new restaurant at that intersection after ruling out the new Brunswick Novant Medical Center site. Construction should begin this year, Bradshaw said. Harris Teeter has dropped plans for a store at N.C. 211 and Midway Road, Bradshaw said, skeptical that there are enough people living in the area and cautious of competing with the proposed Lowes Foods, which could begin construction late this year. Chick-fil-a and T.J. Maxx also expressed an interest in coming to Brunswick County, and Bradshaw said he will be following up.
Horry County growth rises 37 percent in 2010 Census
Sun News - The surge was led by bedroom communities such as Carolina Forest, which quintupled in population, according to data released by the U.S. Census Bureau on Wednesday. The county's growth rate is slightly higher than it was between 1990 and 2000, when Horry County swelled by 36.5 percent. Georgetown County grew at a much slower rate in the past decade, only seeing a single-digit increase in population. A few oceanfront and rural census tracts along the Grand Strand lost population. Horry County's population rose from 196,629 in 2000 to 269,291 in 2010, and only trailed Dorchester and York counties for highest growth rate. Overall, South Carolina's population grew 15.3 percent. The county is now the fifth most populous in the state, surpassing Lexington County. Greenville County is the most populous county in the state with 451,225 residents.
Coastal, urban and suburban counties in the state generally grew, but several rural counties lost population. Georgetown County grew at a slower rate than Horry, increasing 7.8 percent to 60,158 people from 55,797 in 2000. Bedroom communities - areas that are mostly residential - grew the fastest, with the census tract containing Carolina Forest experiencing population growth of 506 percent. That explains the population boom in Carolina Forest from 3,338 residents to more than 20,000 in the past 10 years. The Forestbrook neighborhood more than doubled its population with 125 percent growth and the Burgess area grew 87 percent. That trend also emerged in Georgetown County, where the Waccamaw Neck area - including Murrells Inlet and Pawleys Island - grew the fastest.
Some coastal areas lost population, led by the census tract containing the area between U.S. 17 Business and the beach in Garden City, which saw a 15.5 percent dip. The population of an oceanfront census tract from 17th Avenue North in Surfside Beach to Fourth Avenue South in Myrtle Beach shrank 10.6 percent. Rural areas in Georgetown County mostly lost population, as did the census tract containing the city of Georgetown's downtown area, which lost roughly 400 residents. The city of Myrtle Beach grew 19.1 percent to 27,109 and is the 14th most populous incorporated place in the state.
Horry County Schools have already built River Oaks Elementary School to cope with Carolina Forest's growth, said Joe Burch, who coordinates planning for the district. The school is scheduled to open in August 2012. No other building is planned yet, but the district will look at the census to determine how to resolve disparities between different areas. Georgetown County Schools grew by about 100 students this year but lost about 1,000 students during the three previous years, mostly in rural areas, Superintendent Randy Dozier said. Waccamaw Neck was the only area of the county that showed strong growth. A new intermediate school has opened there and the high school is expanding.
Coastal, urban and suburban counties in the state generally grew, but several rural counties lost population. Georgetown County grew at a slower rate than Horry, increasing 7.8 percent to 60,158 people from 55,797 in 2000. Bedroom communities - areas that are mostly residential - grew the fastest, with the census tract containing Carolina Forest experiencing population growth of 506 percent. That explains the population boom in Carolina Forest from 3,338 residents to more than 20,000 in the past 10 years. The Forestbrook neighborhood more than doubled its population with 125 percent growth and the Burgess area grew 87 percent. That trend also emerged in Georgetown County, where the Waccamaw Neck area - including Murrells Inlet and Pawleys Island - grew the fastest.
Some coastal areas lost population, led by the census tract containing the area between U.S. 17 Business and the beach in Garden City, which saw a 15.5 percent dip. The population of an oceanfront census tract from 17th Avenue North in Surfside Beach to Fourth Avenue South in Myrtle Beach shrank 10.6 percent. Rural areas in Georgetown County mostly lost population, as did the census tract containing the city of Georgetown's downtown area, which lost roughly 400 residents. The city of Myrtle Beach grew 19.1 percent to 27,109 and is the 14th most populous incorporated place in the state.
Horry County Schools have already built River Oaks Elementary School to cope with Carolina Forest's growth, said Joe Burch, who coordinates planning for the district. The school is scheduled to open in August 2012. No other building is planned yet, but the district will look at the census to determine how to resolve disparities between different areas. Georgetown County Schools grew by about 100 students this year but lost about 1,000 students during the three previous years, mostly in rural areas, Superintendent Randy Dozier said. Waccamaw Neck was the only area of the county that showed strong growth. A new intermediate school has opened there and the high school is expanding.
Sunday
New eats coming to Broadway at the Beach in Myrtle Beach
Sun News - Renovation was under way last week on four new restaurants coming to Broadway at the Beach this spring, with some closer to opening than others. Good Time Charley's will be the first to open in a former retail location near Broadway's Celebrity Square and is slated to start serving customers this coming week, owner Pete Lloyd said. "We've got to hang up some décor, move in some furniture and do final cleaning and we'll be ready to roll," Lloyd said Thursday. Lloyd is also part owner of the Beach House Restaurant, 1205 Ocean Boulevard, and Fire Island Grille at Barefoot Landing. Nearby, Carlos'n Charlie's, which will take the place of Uno Chicago Grill, is set to open in the first week of April, General Manager Bernardo Chavez said. The restaurant is owned by Senor Frog's and will offer upscale Mexican fare, Chavez said. The restaurant will serve as a bar at night for those 21 years old and older, he said while standing in front of a partially constructed DJ booth.
On the other side of the complex, construction workers walked in and out of the gutted building that formerly housed Tripp's as they worked on transforming it into Capriz, an Italian restaurant owned by Charleston-based TBonz Restaurant Group. Construction on Tilted Kilt, a Celtic-themed bar with waitresses dressed as scantily clad school girls, is expected to begin later this month in the former Tony Roma's space. The bar and restaurant is expected to open in July, said Ed Messina, franchise development director. Burroughs & Chapin Co. Inc., which owns Broadway at the Beach, chose not to renew the leases with several restaurant tenants and a B&C rep has said it is part of an effort to shake up the restaurant lineup, which hadn't changed since 2005.
On the other side of the complex, construction workers walked in and out of the gutted building that formerly housed Tripp's as they worked on transforming it into Capriz, an Italian restaurant owned by Charleston-based TBonz Restaurant Group. Construction on Tilted Kilt, a Celtic-themed bar with waitresses dressed as scantily clad school girls, is expected to begin later this month in the former Tony Roma's space. The bar and restaurant is expected to open in July, said Ed Messina, franchise development director. Burroughs & Chapin Co. Inc., which owns Broadway at the Beach, chose not to renew the leases with several restaurant tenants and a B&C rep has said it is part of an effort to shake up the restaurant lineup, which hadn't changed since 2005.
More affordable housing under way in Myrtle Beach
Sun News - A new, 56-unit apartment complex under construction in Myrtle Beach is expected to help fill the perpetual need for affordable housing in the area. The second phase of Bay Pointe, which is on Mr. Joe White Avenue near Robert Grissom Parkway, is expected to be completed in August, about a year after the first phase opened next door, according to Progress Builders, which is building the development. The first phase filled quickly, prompting Progress Builders and Bradley Development to put together plans for the second phase, which will have two- and three-bedroom apartments, and will more than double Bay Pointe's size. "There's a lot of interest left over from the original community there," said Michael Allard, the chief construction officer at Progress Builders. "The demand for affordable housing is never fully served by supply."
There is a long waiting list for people who want Section 8 housing vouchers, and places like Bay Pointe, which don't require but do accept the vouchers, help people who need affordable housing, said Sharron Forrest, the executive director of the Myrtle Beach Housing Authority. A local a real estate analyst with the Coastal Carolinas Association of Realtors, said that there is consistently a need for workforce affordable housing. "There is a pent-up demand," he said. "I think we have a need and it's great to see people filling it." The first phase was full within three months and phase two is expected to fill up just as quickly, said Brad Queener, president of Bradley Development Co. and the developer of the project.
The two-bedroom apartments will range in price from $520 to $630 and the three-bedroom apartments will range in price from $595 to $685, depending on the renter's income. "The demand for this type of housing has certainly gone up and because of the tax credits and the equity infusion we can build deals now, and market rate deals now are much tougher to be built," Queener said. There will be requirements as to who can rent apartments in the building because the project is funded through the state's Low Income Housing Tax Credit, Allard said. The credit is an indirect federal subsidy that is used to finance the development of affordable rental housing for low-income households, according to the U.S. Department of Housing and Urban Development's website. In exchange for their financial backing, the investors will receive a tax credit.
There is a long waiting list for people who want Section 8 housing vouchers, and places like Bay Pointe, which don't require but do accept the vouchers, help people who need affordable housing, said Sharron Forrest, the executive director of the Myrtle Beach Housing Authority. A local a real estate analyst with the Coastal Carolinas Association of Realtors, said that there is consistently a need for workforce affordable housing. "There is a pent-up demand," he said. "I think we have a need and it's great to see people filling it." The first phase was full within three months and phase two is expected to fill up just as quickly, said Brad Queener, president of Bradley Development Co. and the developer of the project.
The two-bedroom apartments will range in price from $520 to $630 and the three-bedroom apartments will range in price from $595 to $685, depending on the renter's income. "The demand for this type of housing has certainly gone up and because of the tax credits and the equity infusion we can build deals now, and market rate deals now are much tougher to be built," Queener said. There will be requirements as to who can rent apartments in the building because the project is funded through the state's Low Income Housing Tax Credit, Allard said. The credit is an indirect federal subsidy that is used to finance the development of affordable rental housing for low-income households, according to the U.S. Department of Housing and Urban Development's website. In exchange for their financial backing, the investors will receive a tax credit.
Thursday
Old Kroger store in Surfside Beach area torn down, rehab begins
Sun News - The stagnant corner at S.C. 544 and U.S. 17 Business near Surfside Beach is set to be rehabilitated, starting with the demolition of an old Kroger grocery store that began last week, the developer said. Construction on a new 10,000 square-foot facility - to house Spencerz Sports Pub and other businesses - will begin around April 1 on the site of the former grocery, said Dennis Wade, president and CEO of the Jackson Companies, which is developing the property as part of a joint venture. Another lot near the corner will be developed in preparation for a major retailer to locate there in 2012, Wade said. The company will also improve street access to the businesses on the corner and has already obtained permits from Horry County and the state Department of Transportation to do so, he said.
"We think with some sprucing up and some new things there it will be more vibrant, and hopefully create traffic and activity," Wade said. Spencerz Sports Pub will relocate from its location on an adjacent lot to one of four available spaces in the new building by August in time for college football season, and its current location will be torn down, owner Bill Spencer said. "Now I'm sitting on a little island by myself. I mean unless you're going to Spencerz you might drive by it without even knowing its there," he said. The new building should bring in business and make it easier to turn off the highway into the bar, he said. Spencer said the bar's current location should stay open up until the new location opens. The Jackson Companies operate the Ocean Lakes Campground and other interests along S.C. 544. The companies' founder, Mary Emily Jackson, established a trust for her children which owns the property on the corner with U.S. 17. Jackson died in December.
"It's a prime corner and a prime intersection and honestly the family was just not happy aesthetically," Wade said. Ocean Lakes Family Campground is across U.S. 17 from property that is being developed. The Kroger building was at least 30 years old, Wade said. The Jackson family trust acquired the property in 2009 after the grocery store had closed. "You can't attract a good tenant to a building that old and expect them to pay market rents," he said. The remaining three spaces in the building to be occupied by Spencerz have yet to be rented out, Wade said. The buildings that house former Baskin Robbins, which closed in January, and a Burger King will also be demolished, Wade said. Three vacant lots on the property will remain open for future development, he said. "Once things start and get underway, once the buildings are gone and everything is built and raised, that will generate some interest from some people," Wade said.
"We think with some sprucing up and some new things there it will be more vibrant, and hopefully create traffic and activity," Wade said. Spencerz Sports Pub will relocate from its location on an adjacent lot to one of four available spaces in the new building by August in time for college football season, and its current location will be torn down, owner Bill Spencer said. "Now I'm sitting on a little island by myself. I mean unless you're going to Spencerz you might drive by it without even knowing its there," he said. The new building should bring in business and make it easier to turn off the highway into the bar, he said. Spencer said the bar's current location should stay open up until the new location opens. The Jackson Companies operate the Ocean Lakes Campground and other interests along S.C. 544. The companies' founder, Mary Emily Jackson, established a trust for her children which owns the property on the corner with U.S. 17. Jackson died in December.
"It's a prime corner and a prime intersection and honestly the family was just not happy aesthetically," Wade said. Ocean Lakes Family Campground is across U.S. 17 from property that is being developed. The Kroger building was at least 30 years old, Wade said. The Jackson family trust acquired the property in 2009 after the grocery store had closed. "You can't attract a good tenant to a building that old and expect them to pay market rents," he said. The remaining three spaces in the building to be occupied by Spencerz have yet to be rented out, Wade said. The buildings that house former Baskin Robbins, which closed in January, and a Burger King will also be demolished, Wade said. Three vacant lots on the property will remain open for future development, he said. "Once things start and get underway, once the buildings are gone and everything is built and raised, that will generate some interest from some people," Wade said.
Tuesday
Lot sales may spur more home building in the Myrtle Beach area
Sun News - Toward the end of 2010, residential lot sales along the Grand Strand quietly started to pick up, driven by low prices, a shift that may slowly help improve what has been a struggling home building industry, according to area Realtors and builders. Residential lot sales increased almost 43 percent in 2010, up from 406 sales in 2009 to 580 last year, according a local company that tracks the real estate market. Prices on lots have dropped dramatically, and that has allowed some buyers the ability to build a new home they may not have been able to afford several years ago. The increase in lot sales may boost the home building industry as construction gets under way on neighborhoods where there has been little activity on vacant land. Those partially empty communities may start improving and the local economy will benefit from the added construction activity, according to area Realtors and builders.
The former president of the Horry Georgetown Home Builders Association, said that the real estate market and the home building industry have changed and that 2011 should bring improvements. "I think everything has been reset," he said. "We're now in the new normal. I think things have leveled off, we've seen the absolute worst." The activity in the market is good news, but added that there is still a lot of inventory on the market. The absorption rate for residential lots in Horry and Georgetown counties is 59.01, which means there is a roughly 59-month or nearly five-year supply of lots on the market. The owner of a local real estate franchise office, said lot sales picked up in 2010 for his company with a majority of the buyers he sold to planning to build on the property. "Someone can buy out there and build and their price per square foot is equal to or less than the resales," he said. The pick-up in lot sales follows the downturn that brought the sales almost to a standstill. A year ago this wasn't even a conversation," he said. "The prices of these lots have come down so much that it starts to make sense." Many of the lot owners who are selling, or losing the properties in foreclosure, bought the land as an investment or planned to move from up North but plans changed. Some of those owners have had to take a "massive" loss, and the buyers are sometimes getting lots for the cost of putting in the sewer, water and electric lines, he said. The median sales price for a residential lot on the Grand Strand in 2010 was $44,900, which was down from $57,000 in 2009, and down about 55 percent from the peak in 2006.
Another local broker said the lot sales, some of which are in what were nearly dormant subdivisions, are good for the real estate market as a whole. "You've got to have sticks going up to create activity, and it's working," she said. "I think you're going to see more new construction than the past two years, but not massive amounts." Builders along the Grand Strand have mostly struggled as business dropped with the collapse of the real estate market. Despite what some describe as an improvement in consumer attitudes, the number of building permits continued to drop last year. The number of building permits issued by Horry County was down slightly, dropping from 1,471 in 2009 to 1,440 in 2010, according to Market Opportunity Research Enterprises, a company that tracks the real estate market. In Georgetown County, the number of permits rose from 119 in 2009 to 132 last year. Brunswick County, N.C., permits dropped to 779 in 2010 from 852 in 2009, according to MORE. Builders are having to find ways to get business, and the dropping land prices, which allow them to offer the finished home at a lower price, are helping.
Lot sales are a good indication but it's unlikely that every one of those sales will translate into an immediate build. Some buyers are seeing good values on lot prices and are buying with the intention of building a year or two from now, he said. The low prices on lots have helped some potential customers, though. "For a long time over the last several years a lot of [lot prices] got to a point that they were squeezing people out of the marketplace, and what's kind of happened is that prices have been reset and readjusted," he said. "That has given some people an opportunity that may have been priced out." He is optimistic about the year ahead, and the number of inquiries to his company is up about 15 percent so far in January over what it was last year. He said there may be some more challenges ahead, including with financing, but that the industry can only improve. Financing does still present a challenge to some buyers, but Coyne said banks' tightening of restrictions makes sense. "Without a doubt it's been challenging," he said, adding "I feel like some of that has been overly restrictive, but it will find its level too."
Another improvement, said the owner of a local home building company, is that cash purchasers have more confidence and are comfortable spending their money. Despite some financing challenges, more lenders are offering financing on new homes than were at this time last year, he said. He has 11 homes under way, and said the company's philosophy is that prices have to meet the market, because that is what buyers want. He said he builds new custom homes that compete with or beat the prices of existing homes, even those in foreclosure. "When the market turns you have to find product that will sell, that the market will bear." The company has been able to do that by keeping margins low and using a volume-based mentality, negotiating contracts with suppliers and subcontractors in advance in bulk, to be able to provide lower prices. "Lot prices have depressed and now somebody can buy those lots, have a warranty and can have exactly what they want," he said.
That ability to customize a new home is a draw to many buyers, said a real estate analyst with the Coastal Carolinas Association of Realtors. "Most people if they had the option of a new and a resale home and they were the same price, people would choose the new home," he said. The builder building in the right price range is most likely going to do well, especially if that price is competitive with prices of an existing house in the same neighborhood. Typically new construction helps boost prices in a neighborhood or subdivision, and while in the short-term current construction may not do that, the activity should benefit the community, he said. Some communities homeowners' associations have started working with Realtors and builders to resolve potential issues and try to get lots sold and houses built. "The market is recovering. Building is growing here," he said. "Everybody's starting to think towards the future and doing what everybody has to do to get these products going."
The former president of the Horry Georgetown Home Builders Association, said that the real estate market and the home building industry have changed and that 2011 should bring improvements. "I think everything has been reset," he said. "We're now in the new normal. I think things have leveled off, we've seen the absolute worst." The activity in the market is good news, but added that there is still a lot of inventory on the market. The absorption rate for residential lots in Horry and Georgetown counties is 59.01, which means there is a roughly 59-month or nearly five-year supply of lots on the market. The owner of a local real estate franchise office, said lot sales picked up in 2010 for his company with a majority of the buyers he sold to planning to build on the property. "Someone can buy out there and build and their price per square foot is equal to or less than the resales," he said. The pick-up in lot sales follows the downturn that brought the sales almost to a standstill. A year ago this wasn't even a conversation," he said. "The prices of these lots have come down so much that it starts to make sense." Many of the lot owners who are selling, or losing the properties in foreclosure, bought the land as an investment or planned to move from up North but plans changed. Some of those owners have had to take a "massive" loss, and the buyers are sometimes getting lots for the cost of putting in the sewer, water and electric lines, he said. The median sales price for a residential lot on the Grand Strand in 2010 was $44,900, which was down from $57,000 in 2009, and down about 55 percent from the peak in 2006.
Another local broker said the lot sales, some of which are in what were nearly dormant subdivisions, are good for the real estate market as a whole. "You've got to have sticks going up to create activity, and it's working," she said. "I think you're going to see more new construction than the past two years, but not massive amounts." Builders along the Grand Strand have mostly struggled as business dropped with the collapse of the real estate market. Despite what some describe as an improvement in consumer attitudes, the number of building permits continued to drop last year. The number of building permits issued by Horry County was down slightly, dropping from 1,471 in 2009 to 1,440 in 2010, according to Market Opportunity Research Enterprises, a company that tracks the real estate market. In Georgetown County, the number of permits rose from 119 in 2009 to 132 last year. Brunswick County, N.C., permits dropped to 779 in 2010 from 852 in 2009, according to MORE. Builders are having to find ways to get business, and the dropping land prices, which allow them to offer the finished home at a lower price, are helping.
Lot sales are a good indication but it's unlikely that every one of those sales will translate into an immediate build. Some buyers are seeing good values on lot prices and are buying with the intention of building a year or two from now, he said. The low prices on lots have helped some potential customers, though. "For a long time over the last several years a lot of [lot prices] got to a point that they were squeezing people out of the marketplace, and what's kind of happened is that prices have been reset and readjusted," he said. "That has given some people an opportunity that may have been priced out." He is optimistic about the year ahead, and the number of inquiries to his company is up about 15 percent so far in January over what it was last year. He said there may be some more challenges ahead, including with financing, but that the industry can only improve. Financing does still present a challenge to some buyers, but Coyne said banks' tightening of restrictions makes sense. "Without a doubt it's been challenging," he said, adding "I feel like some of that has been overly restrictive, but it will find its level too."
Another improvement, said the owner of a local home building company, is that cash purchasers have more confidence and are comfortable spending their money. Despite some financing challenges, more lenders are offering financing on new homes than were at this time last year, he said. He has 11 homes under way, and said the company's philosophy is that prices have to meet the market, because that is what buyers want. He said he builds new custom homes that compete with or beat the prices of existing homes, even those in foreclosure. "When the market turns you have to find product that will sell, that the market will bear." The company has been able to do that by keeping margins low and using a volume-based mentality, negotiating contracts with suppliers and subcontractors in advance in bulk, to be able to provide lower prices. "Lot prices have depressed and now somebody can buy those lots, have a warranty and can have exactly what they want," he said.
That ability to customize a new home is a draw to many buyers, said a real estate analyst with the Coastal Carolinas Association of Realtors. "Most people if they had the option of a new and a resale home and they were the same price, people would choose the new home," he said. The builder building in the right price range is most likely going to do well, especially if that price is competitive with prices of an existing house in the same neighborhood. Typically new construction helps boost prices in a neighborhood or subdivision, and while in the short-term current construction may not do that, the activity should benefit the community, he said. Some communities homeowners' associations have started working with Realtors and builders to resolve potential issues and try to get lots sold and houses built. "The market is recovering. Building is growing here," he said. "Everybody's starting to think towards the future and doing what everybody has to do to get these products going."
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