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.
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