Self Storage - Best Investment over 10 years?

Bloomberg -Best U.S. Real Estate With Self-Storage: Riskless Return

Buyers look into a storage unit up for auction at Ray's Self Storage facility in Burlington, North Carolina.

The best real estate investment in the past decade was found at the opposite end from trophy resorts and office towers, in 5-foot-by-5-foot lockers.  Self-storage companies, which rent units to small businesses and consumers under names such as “Uncle Bob’s Self Storage (SSS),” produced the best risk-adjusted return among 10 U.S. real estate investment trust indexes in the past decade, according to the BLOOMBERG RISKLESS RETURN RANKING.  They had the highest total return and the third-lowest volatility, for a risk-adjusted gain of 10.6 percent.  Owners of offices, hotels and warehouses fared among the worst, hurt by price swings. Public Storage, CubeSmart, Extra Space Storage Inc. (EXR) and Sovran Self Storage Inc. attracted investors with low debt ratios and steady cash-flow growth in a decade that saw commercial-property values soar to records along with sales of mortgage-backed bonds to finance a wave of takeovers. The debt- to-assets ratio for Public Storage, the largest in the group, is 22.5 percent, half the average 45 percent for REITs, said Michael Knott, managing director of real estate research firm Green Street Advisors Inc., making the stock less susceptible to large price swings if the economy worsens.  “Public Storage (PSA) has incredibly low leverage compared to the average REIT,” Knott, whose firm is based in Newport Beach, California, said in an interview.  “It’s typically not as volatile.”

Warehouses Trail

The Bloomberg REIT Public/Self-Storage Index (BBREPBST) topped gauges tracking healthcare REITs and regional mall REITs, which returned a risk-adjusted 8.4 percent and 7.5 percent, respectively, in the 10 years through April.  Warehouse REITs (BBREINDW), which had the highest volatility and the lowest total return during the period, joined hotels at the bottom, with a risk- adjusted gain of 0.8 percent.
Storage REITs release first-quarter earnings this week. Extra Space Storage said April 30 that first-quarter funds from operations rose 41 percent on higher revenue and cost controls.  Sovran is scheduled to release earnings after the market closes today, and the other two companies in the group report tomorrow.
The risk-adjusted return, which isn’t annualized, is calculated by dividing total return by volatility, or the degree of daily price variation, giving a measure of income per unit of risk.  A higher volatility means the price of an asset can swing dramatically in a short period of time, increasing the potential for unexpected losses.

Basic Units

The ranking compares 10 of the 11 property index types within the Bloomberg REIT index.  It excludes single-tenant REITsbecause that index contains just four mostly smaller members whose business of retail leasing is reflected in broader indexes. Storage REITs had twice the cash-flow growth of REITs in main property types from 2001 to 2011, according to Green Street.  Net operating income for storage facilities open at least one year rose an average 3 percent a year during that period, compared with 1.5 percent on average for other REITs. Companies such as Public Storage of Glendale, California; Salt Lake City-based Extra Space; and CubeSmart (CUBE), of Wayne, Pennsylvania, rent storage space by the month.  The facilities can range from basic 5-foot-by-5-foot (1.5-meter-by-1.5-meter) units to climate-controlled rooms of 25 feet by 25 feet where people can stash goods such as furniture, tools and skis, a salesperson can store product samples, or a small business can keep items as in a mini-warehouse.  Demand tends to be driven by life changes, which often entail moving, such as college graduation, job changes, divorce or death.

Cleaning Out

“If you get married, you don’t necessarily throw your couch away, you don’t necessarily throw away the buffalo head, what have you,” said Clemente Teng, vice president of investor relations for Public Storage.  “You put it in storage.”  Public Storage has about 1 million tenants at any given point in time, with the average lease of existing tenants running about 36 months, Teng said.  More than half its tenants have rented their units for more than one year, he said. “People always think, ‘I’ll just house it for a couple of months and then get it all out, but the problem is once you get all your stuff in, the last thing you want to do is spend a Saturday cleaning it out,” Teng said.

Rents Rise

Occupancy and rents in the storage business probably will increase over the coming year amid rising demand and virtually no new construction, said Chris Sonne, executive managing director of the self-storage industry group at Cushman & Wakefield Inc. The commercial real estate services firm expects occupancy will increase by 1 to 3 percentage points and rents will rise 3 to 3.5 percent, said Sonne, whose group conducts a quarterly survey of about 7,000 facilities in the 50 largest metropolitan areas.
“Physical occupancy is inching back up so they’re able to really raise rents,” Sonne said.
Median occupancy rose to 81.1 percent in the first quarter from 80 percent a year earlier. The median asking rent for a unit of 10 feet by 10 feet at ground level and not climate- controlled climbed to $90 a month in the first quarter from $88 a year earlier, according to Cushman & Wakefield. Public REITs saw stronger rent growth because their revenue-management tools enable them to increase rents to match demand, said Sonne.

‘Not Cheap’

Public Storage, with a market value of $26 billion, accounts for 81 percent of the BBREIT Public/Self Storage Index.  Its shares closed at $145.04 yesterday, for a dividend yield of 3 percent.  The company operates in 38 states, with Californiaaccounting for about 25 percent of revenue. “It’s not a cheap stock,” Knott said.  “It should be an outperformer over a long time period, but over the next three, six or nine months, it’s hard to say it’s going to outperform.” Two-thirds of the 25 analysts who follow Public Storage have “hold” or “sell” recommendations on the stock, which has returned 58 percent since April 2010, according to data compiled by Bloomberg. Storage wasn’t always so attractive to investors.  In the five years through 2006, when the Bloomberg REIT index more than doubled, regional malls and shopping centers topped the ranking.  Storage, while second by total return in that period, fell to third when adjusted for risk, because it had the second-highest volatility, after hotels.

‘Low Barriers’

Those price swings coincided with a period where the supply of storage units increased in the U.S. New construction of facilities rose by more than half in the 2000s, with the fastest growth in the beginning and middle of the decade.  The U.S. had an estimated 50,048 self-storage facilities last year, up from 29,955 in 1999, according to the Self-Storage Almanac, published by Phoenix-based MiniCo Insurance Agency LLC, which provides insurance and publications for the industry.  Storage facilities also got larger, growing to an average of 566 units each in 2011, from an average 243 units in 2000, according to the Self- Storage Almanac. “During 2001 to 2007, there was a great amount of new supply built because of low barriers to entry and cheap financing,” said Teng of Public Storage.  “All that has virtually come to a halt.”
The relatively low capital needs of the storage business became more attractive after the financial crisis, as investors shunned companies with large debt burdens.  Storage REITs topped the riskless return ranking since the end of 2009, with the second-lowest volatility and the second-highest total return.  Regional malls, No. 2 over that period, had the best total return and the third-highest volatility.

‘No Carpeting’

Storage units are relatively cheap to build and “when we re-rent a space, all we have to do is sweep it out,” said Teng.  “We don’t have to change the carpeting, paint the walls” or otherwise make improvements to get a new tenant.  High leverage remains a concern for some hotel REITs, which have trailed in returns because recreational travel hasn’t fully rebounded from the slump caused by the recession in 2008 and 2009.  Hotel operators tend to see bigger swings in net operating income than other REITs, reflecting their lower operating margins, according to Green Street. Hotel REITs returned just 0.8 percent over the past 10 years when adjusting for risk.  They had the second-highest volatility and the second-lowest return.  Office REITs (BBREOFPY), whose assets include well-known “trophy” properties such as the General Motors Building in Manhattan and Embarcadero Center in San Francisco, had the fourth-worst risk-adjusted return in the period.

Appealing Exteriors

Increased usage of Internet marketing has helped storage REITs attract more customers from smaller operators during the sluggish economic recovery, said John Murphy, a vice president at Cohen & Steers Inc. (CNS), a New York-based investor in real estate shares that manages almost $45 billion.  The storage business is fragmented, with the publicly traded REITs accounting for just 10 percent of the U.S. market, he said. “They’re able to steal market share in a time like today, when demand is growing but at a slow pace,” said Murphy.  “With revenue management, they know which facilities they can increase rents on” week by week.  The geographic diversification and large base of tenants gives the publicly traded storage REITs some protection from economic swings, offsetting the short-term nature of storage leases, said Murphy.
Sovran, which operates under the Uncle Bob’s Self Storage name, has been reducing concessions, or landlord incentives, as the economy came out of recession starting in 2009, said Diane Piegza, a spokeswoman for Sovran Self Storage, based in the Buffalo, New York, suburb of Williamsville.  During the recession, Sovran offered as much as six weeks free rent and ran a “name-your-price” promotion to attract renters.  “We’re not recession-proof by any means but we’re a little more resistant than other types of real estate,” Piegza said.

Sale-Leasebacks: Corporations Squeeze Capital out of Real Estate

Area Development - Sale-Leasebacks: Corporations Squeeze Capital out of Real Estate

Low financing rates, and access to capital offer compelling reasons for corporate sale-leasebacks.

  

Low interest rates are creating a compelling argument for sale-leaseback financing. Sale-leasebacks are often viewed as an alternative financing source that is attractive to non-rated or below-investment-grade companies that are hungry for capital.  Yet, sale-leasebacks are active across the board — from “A” rated public companies to smaller mid-size firms.  The low-interest-rate environment, coupled with strong investor demand for quality properties, is helping to fuel transactions.  For example, New York-based W.P. Carey & Co. had a record year in 2011, completing $1.2 billion in sale-leaseback investments.  The investor typically acquires office, industrial, and retail facilities both in the United States and around the globe.  “We’re seeing tons of deals this year, and we think we’re going to have another big year,” says Gino Sabatini, managing director and co-head of Domestic Investments at W. P. Carey.  Buyers such as W.P. Carey base the purchase price on their own cost of capital, which is at near historic lows. That, in turn, is producing favorable financing for sale-leaseback transactions.  Cap rates, particularly for high-quality properties with top credit tenants, are extremely low.

Low Cap Rates
For example, United Technologies completed a sale-leaseback on an office facility in Bradenton, Fla., last December for $20 million or roughly $188 per square foot.  The deal was notable in that it produced a 7.17 percent cap rate.  That is a low rate considering United Technologies agreed to a 10-year lease on the property, which is about half the term that investors typically prefer.  The cap rate is the rent divided by the purchase price. So companies are able to lock-in incredibly low rents in the current market.  “Cap rates in the last year have been as low as they have ever been, and they continue to be low,” says Sabatini.  “It’s a great time to look at pulling the trigger if you know you have assets that you want to remain in for a long time.”  Certainly, favorable rates are a big selling point.  However, other financing sources such as traditional mortgages also are boasting exceptionally low rates.  One difference for sale-leaseback financing is that companies can lock in the low rates on a very long-term basis.  The typical lease structure is 15 to 20 years compared to a five- or even 10-year term on a commercial mortgage.  Sale-leasebacks also allow the user to get 100 percent of their capital out of the real estate compared to a bank mortgage where 70 to 75 percent loan-to-value ratios are more the norm today.

Firms Unlock Capital
Over the last several years, companies have seen that it is not the best use of capital to keep it locked up in real estate, says Jonathan M. Wolfe, a senior vice president and director of Grubb & Ellis Sale Leasebacks/Net Leased Properties Group in Chicago.  “Why not take advantage of the fact that you can get 100 percent of that capital out via sale-leaseback, and then put that capital back into the business,” says Wolfe.  Corporations are finding that sale-leasebacks make good strategic sense for their overall business plan.  “Oftentimes companies want to allocate capital toward the core competencies, rather than keeping money tied up in real estate,” says Wolfe.  Attractive pricing has been a key tipping point for firms such as Blue Cross and Blue Shield of Minnesota.  The healthcare provider recently announced the sale-leaseback of six buildings totaling 1.1 million square feet, including its suburban Minneapolis headquarters, as well as two properties in the smaller Minnesota communities of Aurora and Virginia.  Blue Cross closed on the transaction with W.P. Carey in January for an undisclosed price.  BlueCross also wanted to take the equity that they had tied up in these buildings and reinvest in their core business.  “A long-term sale-leaseback was the logical financing option for redeploying the illiquid capital tied up in our real estate holdings to fund strategic initiatives that enable us to improve the health and wellness of our members and all Minnesotans,” says Pamela Sedmak, chief financial officer for Blue Cross of Minnesota.  In another example, a large private company was 10 years into a long-term lease for an industrial property.  The company opted to exercise its purchase option to buy the property.  The company recognized that they could enter into a sale-leaseback transaction and resell the property for what they bought it for, plus transaction costs, and their new net rent would be 40 percent less than what they would have had to pay on the prior lease.  “What that gives you is an example of a large corporate tenant and their treasury function making a decision that allowed them to lock-in a low rate going forward, because of the low financing rate,” says James R. McCartney, CFA, managing director at Net Lease Capital Advisors in Nashua, N.H.

Strategies Influence Decisions
Certainly, the financial advantages are one of the main drivers for sale-leaseback financing.  The argument against sale-leasebacks is that most companies still have a lot of cheap financing available to them.  As a result, those companies that are moving forward with sale-leasebacks are often motivated by other strategic reasons.  Some firms consider sale-leasebacks as part of an exit strategy for corporate real estate.  A company will structure a sale-leaseback with a shorter term, perhaps five to seven years, if they know they will be closing or relocating operations after that term expires.  Even though investors will price the deal lower due to the shorter term, it allows the occupant to re-capture some of that value early rather than selling a vacant building for a potentially steep discount when they do vacate the property.  In another recent example, a company bought back a facility that they were leasing and then entered into a new sale-leaseback agreement in order to give themselves expansion options.  “They wanted to be able to do some things on the site that they were not able to do under the prior lease,” says McCartney.  “So there were some business reasons as to why they wanted to do a sale-leaseback, in addition to the obvious financial reasons of locking in a lower lease rate.”

Pricing Gap Remains
Although low interest rates are creating favorable pricing for many transactions, there is no “one-size-fits-all” in the sale-leaseback arena.  Investor demand and pricing vary widely depending on tenant credit, location, and the quality of the real estate.  Like the broader commercial real estate investment market, the sale-leaseback niche is seeing a large gap between “A” properties and lesser-quality deals.  Cap rates for sale-leasebacks for properties in core markets with credit tenants and long lease terms are at near historic lows.  However, properties in “B” and “C” markets with less stellar credit have actually seen cap rates increase.  “The properties are more challenging when you start getting into the middle-market credits in secondary and tertiary markets,” says Wolfe.  “It is the challenge of being able to finance those deals in a market where lenders are still very cautious, and also a challenge of finding a buyer pool that is willing to take on both the credit risk and the real estate risk associated with those deals.”  That said, there is still a buyer market for distressed properties and tenants.  Those deals are tougher to get done — but they are nevertheless getting done.  In some cases, the risk translates into a higher return or cap rate for the buyer.  In other cases, both buyers and sellers are being more flexible — and creative — to structure deals that can benefit both sides.  One alternative for companies is to execute a ground-only sale-leaseback.  A company can execute a sale-leaseback on the ground in order to access a low cap rate, and still be able to put some type of leasehold financing on the improvements of the facility.  Another example of more creative deal structuring includes “earn-out” security deposits.  For example, an investor may buy a sale-leaseback property and then take a six-month or one-year security deposit with an earn-out based on “earnings before interest, taxes, depreciation, and amortization” (EBIDA) thresholds, where risk and return is more closely tied to the more immediate performance of the tenant.  Such examples show that sale-leasebacks have adapted to the more challenging market and are not as “boilerplate” as they were several years ago.  That flexibility is helping to spark added transaction volume.  “Structuring sale-leasebacks today requires more creativity from CFOs, CEOs, brokers, and buyers, particularly in situations where there is more distress,” concludes Wolfe. 

 

 

 

 

 

 

 

 

Occupanct Rate Close to Prior Levels

Apartment Sector Remains the Darling of Commercial Real Estate

Preliminary Trends – Reis Publishes Q2 Data Aug. 1, 2012

REIS - The strong performance of the apartment sector continued unabated in the second quarter of 2012 as national vacancies fell by another 20 basis points to 4.7%.  For two consecutive quarters the national vacancy rate has been marching below the benchmark 5% level used as a heuristic by apartment landlords for rent increases when the market tightens.

Net absorption remained relatively strong, with 25,540 units leasing up.  This represents a slowdown from the first quarter’s net absorption of 34,448 units, but the moderation in vacancy compression is not unexpected.  When the market tightens and vacancy reaches very low levels, landlords shift their strategy for growing revenue from vacancy decline to accelerating rent increases.  As a result, national asking and effective rent growth have started to accelerate.  With availability scarce, landlords have little incentive to offer concessions, and the gap between asking and effective rent levels continue to narrow quickly.  For some metro specific trends, check out the latest WSJ article citing preliminary Q2 data from Reis.

 

 Despite the good news, there are risks on the horizon, namely increasing construction.  Developers have begun building properties to take advantage of the tight market conditions.  Unless there are delays, Reis expects about 70,000 units to come online in 2012, which is about twice as much as 2011, and even more units are slated to come online in 2013.  ReisReports will publish complete Q2 market reports for 200 metro areas on August 1. Continue to check our blog for more preliminary trends as well as special promotions for access to ReisReports.

Hotel Profits on the Rise

PKF - The U.S. lodging industry recovery may have begun in 2010, but it wasn’t until 2011 that the improved prosperity was shared by most all hotels in the country.  In 2011, 80.5 percent of the properties that participated in PKF Hospitality Research’s (PKF-HR) Trends® in the Hotel Industry annual survey enjoyed an increase in total revenue, while nearly three-quarters (72.3%) of the participants achieved growth in profits.  The 2012 edition of Trends® presents aggregate average changes in unit-level revenues, expenses, and profits from 2010 to 2011.  The data come from a sample of nearly 7,000 financial statements received from hotels located throughout the United States.  For the Trends® report, profits are defined as net operating income (NOI) before deductions for capital reserves, rent, interest, income taxes, depreciation, and amortization.

Profits for All

On average, hotels in the 2012 edition of Trends® sample saw their profits increase by 12.7 percent in 2011.  In fact, all property type categories experienced gains on the bottom-line in excess of 6.0 percent.  Resort hotels lead the way with an NOI gain of 18.1 percent, followed by full-service hotels which posted a 14.7 percent increase in profits. Not surprisingly, these two property type categories also achieved the greatest gains in average daily room rates (ADR) from 2010 to 2011.  Lagging in profit growth were suite hotels. Both extended-stay and full-service suite hotels were unable to leverage their lofty occupancy levels into the magnitude of ADR gain required to significantly drive profitability.  While news of growing profits is welcome, longer-term U.S. hotel owners know that their investment still has a ways to go to achieve the annual dividends that were earned prior to the recent recession.  In 2011, the average Trends® hotel achieved a profit level equal to $12,972 per available room. In nominal dollars, this is still short of the NOI that was achieved in 2005 ($13,886), and roughly 25 percent short of the peak profit levels achieved in 2007 ($16,868).

Expense Control

In 2011, managers of the properties in the Trends® sample were able to convert a 6.2 percent increase in total revenue into the 12.7 percent NOI gain by limiting operating expense growth to just 4.3 percent. While the 4.3 percent growth in expenses was greater than the 3.2 percent rise in inflation for year, it is relatively modest compared to the increases in operating expenses observed during the second year of previous industry recoveries.  When analyzing changes in operating expenses, we always begin with an examination of labor costs. In 2011, labor represented 45.7 percent of all operating expenses, or 34.6 percent of total revenue.  In 2011, the number of occupied rooms at the average Trends® property increased by 3.1 percent.  This is less than the 4.1 percent increase in labor costs for the year, thus implying a decline in productivity.  However, further analysis indicates that operators did an admiral job managing the most controllable components of labor related expenses.  The 4.1 percent increase in total labor costs was the result of a 3.3 percent increase in salaries, wages, and bonuses, combined with a 6.1 percent rise in payroll-related expenses.  Payroll-related expenditures are comprised of several labor related taxes and employee benefits that are mandated by either contract or government regulations.  Therefore, they are mostly fixed in nature and unable to be adjusted based on the volume of business.  Total operated department expenses increased by 4.5 percent in 2011, while undistributed costs grew by 4.7 percent.  Because of the increasing number of hotels that enjoyed gains in both total revenues and NOI, management fees rose a relatively strong 5.9 percent on average.  The only expense category to post a decline from 2010 to 2011 was property taxes. We attribute this to the continued success of property tax appeals based on the declines in value seen in 2009 and 2010.

Future Profits

Based on the June 2012 edition of PKF-HR's Hotel Horizons®, U.S. hotels will enjoy significant gains in revenue through 2015.  Because occupancy levels will begin to exceed long-run averages in most chain-scale categories, hotel managers will be able to implement more aggressive pricing policies.  Accordingly, future revenue growth will be driven mostly by increases in ADR.  As we know from previous analyses, revenue gains that are driven by ADR growth are very profitable.  The operating practices implemented in 2009 to cut costs during the depths of the recession appear to have continued through 2010 and into 2011.  If this continues, the combination of cost controls and profitable revenue growth will result in one of the most extraordinary periods of profit growth our firm has seen since the first Trends® survey was initiated in 1937.

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North Myrtle Beach water park plans developing

SUN NEWS - Splishing and splashing out of the ocean may soon be easier for residents and visitors on the north Strand. North Myrtle Beach is moving forward in adding a water park at the new sports complex slated for opening in 2014.City spokesman Pat Dowling said the council gave approval to the design about a month ago and is now in the process of negotiating a land lease agreement with private developers planning to construct the facility.  The combination of the sports complex and the thrill of the water park are a package that officials in North Myrtle Beach hope stimulate the economy year round.

A rendering of the North Myrtle Beach Recreation Park and Sports Complex.  The waterpark has space reserved at the bottom behind the ampitheater.

The lease will designate a 5 to 7 acre space for the approximately $26 million water park at the back of the complex near the soccer fields and will likely include provisions for the city to operate the park in the event the developers default on their investment.  Studies by the city, the developer and a third-party consultant indicate that scenario isn’t expected, though that was a concern for some given the failed Hard Rock Park in the Fantasy Harbour area.  Those fears center on the location west of the waterway, but the study by Attraction Consulting International said that shouldn’t be a problem for the park.  ACI said Hard Rock Park failed because of the price of admission and the lack of a family-friendly theme.  Additionally, the study found tourists don’t typically visit amusement rides during the day.  ACI said the location off S.C. 31 and the Robert Edge Parkway will provide visibility and easy access from anywhere on the Grand Strand and even Brunswick County, N.C. Pricing will also be comparable to Wild Water and Wheels in Surfside Beach and Myrtle Waves in the heart of Myrtle Beach.  Outside of resorts, anyone on the north Strand has to head south to find a water park.  “Myrtle Waves and Wild Water and Wheels are great facilities,” Dowling said. “But if you’re here [in North Myrtle Beach] trying to get there it’s not much fun in the middle of summer traffic.”

The option of staying on the north end of town hopefully will keep some business in the city, said Marc Jordan, president of the North Myrtle Beach Chamber of Commerce.  “We’re sending hundreds of thousands of people to other parts of the Grand Strand,” he said.  “We’re building on each others economy but if we can keep them here we’ll want to do that.  Folks are always going to drive to Myrtle Beach and Murrells Inlet or Georgetown, but this is a positive for North Myrtle Beach.”  Dowling said the water park could help seal the deal for teams considering competitions at the North Myrtle Beach Sport Complex.
 About 10 attractions would be part of the parks opening in the summer of 2014 including a lazy river, wave pool and slides.  More rides would be added two years later. Plans also include changing features every few years.  Along with the cost of leasing the land, the city would receive a portion of the profits of about $300,000 annually.  Dowling isn’t sure when the lease agreement will be ready for council approval, but said the city wants to move forward swiftly in order to have the park and the sports complex open simultaneously.

Myrtle Beach Hampton Inn Sold

Taking the deed in an all-cash transaction, Raleigh Krishna LLC is planning to invest $1.8 million into upgrading the 122-room Hampton Inn in Myrtle Beach, S.C.  The seller, Cane Patch Associates of Myrtle Beach, was represented by Anthony Falor and Andrew Kern, managing directors for Atlanta-based Rockwood Real Estate Advisors.  Located at 620 75th Ave. in the Grand Dunes area, the five-story hotel will continue to carry the Hampton Inn flag.  The asset, built in 1995, is situated within blocks of the beach and close to the Carolina Opry, theaters, golf courses, restaurants and shopping.

Growth: Redevelopment company buys troubled Pawleys Island Plaza

 Coastal Observer  -- The largest shopping center in the Pawleys Island business district is under new ownership. A redevelopment is proposed, but details have not been announced.  Sunbelt Ventures of Charleston acquired Pawleys Island Plaza last week.  The center was scheduled to be sold on the courthouse steps next week, but the previous owners, Mickey and Beverly Stikas, transferred the property in a deed in lieu of foreclosure last week.  Sunbelt Ventures bought the mortgage to the plaza in March. The price was not disclosed, but the foreclosure action sought $5.3 million in principal, interest and fees.  “We just took title to it, so it’s happened really quickly,” said Dusty Wiederhold, a managing partner in Sunbelt Ventures.  “We worked out a settlement with Mr. and Mrs. Stikas.”  Wiederhold said he wasn’t prepared to discuss plans for the center this week, but added “it’s all going to happen pretty quickly.”  Sunbelt Ventures has a permit from the state Department of Health and Environmental Control to do voluntary cleanup on the 10.7-acre site on Highway 17 south of Waverly Road. It’s for an environmental assessment for redevelopment.  The Stikases got approval from Georgetown County in 2008 to renovate the shopping center, which was built in 1986 for an A&P grocery store.   The chain converted the store to its Farmer Jack brand, then sold the brand in 1995 to Food Lion, which closed the Pawleys Island store but held on to the lease.  Without an anchor store, the complex suffered.  Sunbelt Ventures specializes in redevelopment. One of its projects was Inlet Square Mall.  Its other projects list national retailers such as Lowe’s, Publix, K-Mart and Sam’s Club.  “This is what we have been doing for 35 years,” Weiderhold said.

Paweys Island Plaza was originally approved as a “planned development” with 83,950 square feet of space. Just over 77,000 square feet were built. Mickey Stikas got county approval in 2008 to increase the amount of space to 100,600 square feet.  But that space isn’t all under one roof, said Boyd Johnson, the county planning director.  He has had “informal discussions” with Wiederhold and others interested in the property.
 Part of the additional space approved in 2008 was for a restaurant that was proposed for the front of the property and would have extended over a stormwater retention pond.  “There’s no way you could do a big-box there without going back to the Planning Commission and County Council,” Johnson said.  “Let’s say there was a big-box that needed 102,000 square feet. We wouldn’t just write the permit.”  The county limits retail stores in the Highway 17 corridor to 40,000 square feet, but that can be altered in a planned development.  An effort to build a 137,000-square-foot Lowe’s in a planned development on Highway 17 at the South Causeway in 2005 was defeated after vigorous community opposition under the banner “Don’t Box the Neck.”  Pawleys Island Mayor Bill Otis said he has concerns that another big-box store may be proposed for Pawleys Island Plaza.  Although outside the town limits, the area is a gateway for the town, just like the South Causeway.

“The Waccamaw Neck and County Council have already addressed the issue of big-box stores with the proposed Lowe’s,” Otis said.  “With another big-box, I believe the outcry would be as significant.”
 Traffic is one area that will be a concern if there is a proposal to change the plan that’s already approved for the property, Johnson said.  “How would a thriving shopping center affect the traffic?” he asked.   “You’ve got a shopping center that’s not thriving.”  Pawleys Island Plaza was built before the county adopted the size limit and before design standards were approved for commercial projects within the Highway 17 corridor.  “If somebody like a big-box chain comes in there, we would take the same approach that we took with Lowe’s,” Johnson said, requiring extensive landscape buffers and a compatible design.  “This is an opportunity to get something that’s aesthetically pleasing.”

New housing complexes aim to fill need for Myrtle Beach area college students

SUN NEWS - Coastal Carolina University students have more housing options as they start moving in this month for the school year, with several privately built apartment complexes popping up to meet demand as the college continues to grow.  At least two new student housing communities are set to open this month in the Conway area, adding more than 250 apartment units for students wanting to live near campus. Officials say the additional units are needed to keep up with the university’s long-term growth. “We saw an opportunity because Coastal Carolina University has grown in the last three years,” said Jourdan Manley, general manager for Monarch 544, one of the new complexes. “With [CCU’s] rapid growth and interest in retention, there’s a heavy need in the area for student housing. We saw that this year in leasing. We’re here to fill that need and provide to the community and college a different experience.”

About 8,832 students were enrolled at CCU for the fall as of Wednesday, with officials projecting that number to grow to 9,300. Last fall, 9,084 students were enrolled, up from 8,706 students in fall 2010, and 8,360 students in fall 2009. Classes start Aug. 20.  Because Coastal requires all freshmen and sophomore students to live on campus, the increased enrollment has left little space for upperclassmen to live in campus housing, according to university officials. There are 3,625 beds on campus with more than 9,000 students expected to enroll this fall, said Debbie Conner, CCU’s vice president for student affairs. The university plans to build four new residence halls on campus, but it will be 2015 before all of them are ready.  “We do not guarantee housing for upperclassmen, so housing apartments close to campus would be very popular,” Conner said. “There’s obviously a need there. The developer saw a need there and was able to build.”
Monarch 544, a 128-unit, 440-bed apartment complex off S.C. 544, and The Cove at Coastal Carolina, a 126-unit, 396-bedroom project also off S.C. 544, are set to open this month just in time for the start of classes. The Cove had its first students move in Friday, with the rest of the students moving in Aug.17. Monarch’s students will move in Aug.18.

Predominantly juniors and seniors will stay at The Cove, which is almost 90 percent full, and the Monarch, which expects to be full with a waiting list, according to officials with the student housing complexes. The demand, they said, is there with the growth of CCU’s student body.  Between fall 2001 and fall 2011, Coastal Carolina University’s enrollment grew 83 percent, according to CCU research officials.
Russell Broderick, vice president for Gilbane Development Co., The Cove’s developer, said the market needs more student housing developments with the university’s high enrollment and number of transfer students.  While Monarch and The Cove are opening in time for this school year, another student-focused housing project isn’t on track to be open this month as originally planned.  Construction started earlier this year on Coastal Estates, a gated 672-room development on U.S. 501, but Conway Planning Director Michael Leinwand said the department noticed a few months ago that construction had stopped. “There’s little activity out there,” Leinwand said.  It’s unclear why work has stopped. McKenzie Jordan, president of Chancel HRT, which is the general contractor on the project, did not return phone calls or respond to an email last week asking for details.  Even with construction stalled on that project, other student housing complexes that have been in the community for some time say there’s enough students to fill their units and the new ones.  “The demand definitely is still there,” said Kirsten Ulm, leasing and marketing manager for University Village at the Coast, a 437-unit apartment complex that has been near CCU for 10 years. As of Thursday, the complex was 89.9 percent full, with a more than 50 percent renewal rate this year, Ulm said.
She said there are not any concerns with the new developments coming in because University Village – which offers a yearly lease from Aug.17 to July 31 and a semester lease from Aug.17 to Dec.31 – charges lower rents for each bedroom than the new student housing complexes. The price for University Village’s three-bedroom, three-bath apartments is $410 to $425 a month.

Monarch, where leases run from Aug.18 to July 31, has four-bedrooms for $595 to $605 a month, with its two-bedrooms sold out. The Cove – which offers 12-month leases – has four-bedrooms, four-baths for $590 a month and two-bedrooms, two-baths for $675 a month, according to its website.  The growth of off-campus student housing is a positive sign for Conway, Mayor Alys Lawson said.  “The goal of the city council is to promote Conway as a college town,” she said. “We feel to have CCU and [Horry-Georgetown Technical College] in Conway is a bonus for our community. We’ve been working with both institutions to bridge the gap between the city and the campuses.  “I’m excited about the new housing developments. There’s a need for those housing developments. With them being adjacent to the university…it makes it a more livable community for the students.”

Golf management goliath created by merger tees off Thursday

Sun News - Strand’s two largest golf companies combining -- The merger of the two largest golf course ownership and management companies on the Grand Strand takes effect Thursday, when the combination of Myrtle Beach National Co., and Burroughs & Chapin Golf Management begins doing business as National Golf Management.  The new company is one of the 15 largest course management companies in the nation with 23 combined courses, and dwarfs competitors in the Myrtle Beach market.  “We are setting out to become an industry leading company,” said company president Bob Mauragas, who held the same position with Myrtle Beach National. “… I think we’re all very interested in being one of the top profitable golf management companies in the country.”   Maraugus said the combined companies generated $33.7 million in total revenue in 2011 and the new company will have more than 700 employees during peak golf months, though many will be part-time. Six employees of the merging companies are losing their jobs, for a net loss of three employees, according to Mauragas.


A press conference to formally announce the new company is scheduled for 11 a.m. Friday at Pine Lakes Country Club.  The merger comes approximately seven months after the two companies signed a letter of intent to unite.  “It’s difficult when you take two successful and prideful companies … and you’ve got to sit down and join arms and find out how do you merge those two?” Mauragas said. “Now the real work gets started, the work of creating one voice, one actionable service plan.”  The merger accounts for 23 of the approximate 90 public courses spanning the coastline from Andrews to Southport, N.C.. It includes 10 courses owned by MBN and five owned by B&C, and another eight courses managed by the two companies.  MBN owns and operates Aberdeen Country Club, Litchfield Country Club, Long Bay Club, Pawleys Plantation, River Club, Waterway Hills Golf Club, Willbrook Plantation, and three courses at Myrtle Beach National Golf Club. It also manages Blackmoor Golf Club, Tradition Club, Wild Wing Plantation and Wachesaw Plantation East. Three of MBN’s courses feature 27 holes.

B&C owns and operates Pine Lakes Country Club, Arcadian Shores Golf Club, the Grande Dunes Resort Course and two courses at Myrtlewood Golf Club, and manages Tidewater Plantation and Golf, River Hills Golf and Country Club, Farmstead Golf Links and Meadowlands Golf Club.  The merger does not include the private Members Club at Grande Dunes, which will continue to be owned and operated by B&C. National Golf Management will be driven primarily by former MBN executives and new employees. Mauragas is the president, MBN’s Jim Woodring is executive vice president overseeing marketing, MBN’s Max Morgan is the vice president overseeing agronomy, and B&C’s Mike Turrise is the human resources director.  Scott Justman is being hired as vice president of golf operations from Reynolds Plantation outside Greensboro, Ga., where he worked for Mauragas for seven years, and final interviews are being conducted for a corporate controller.

“I think that comes from the scalability of merging the two properties,” Mauragas said. “We own 10 properties, they own five. Myrtle Beach National’s core of competency and focus on its business has been golf for 40 years. Burroughs & Chapin has been a longstanding 100-year-plus company that has been focusing its energies on land holdings and opportunities in South Carolina. … Yes Burroughs & Chapin was involved in golf early in this town, but not nearly at the magnitude Myrtle Beach National was.”  Among the six employees not retained in the merger are B&C director of golf operations Archie Lemon, B&C executive vice president of championship golf Bob Swezey, who will remain for a 30-day transition period, and Alicia Harper, B&C’s marketing director who handled golf and other properties. “Most of [the layoffs] come from some overlap in the senior teams,” Mauragas said.  Mauragas is himself a new employee of sorts for the company, according to MBN chief executive officer Matthew Brittain, since he was hired to lead MBN into the merger.  Mauragas has been in the golf industry nearly three decades and was hired in late May away from his position as vice president of golf operations at the six-course, mostly private Reynolds Plantation.


“We were in negotiations with B&C, and our purpose in jumping to Bob was with this merger in mind,” said Brittain, who will not hold an executive position with the new company but will be on its eight-person board of directors along with B&C CEO.  Brittain has been the CEO for the past decade of the company that his family founded in 1971, but will turn his focus to the family’s resort and hotel holdings.  According to a Golf Inc. magazine study of golf course management companies last year, 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 private and semi-private courses at St. James Plantation in Southport.

The merger includes courses up and down the Strand. MBN’s courses are generally located on the north and south ends, while B&C’s holdings are concentrated on the central and north areas, though only two courses in the merger reach North Carolina.  “From a marketing standpoint it filled some of our holes and gave us a complete stable we can offer to the golfer,” Brittain said.  Mauragas said the company will be looking to expand east of the Mississippi River. “It will be my goal to strategically look for – whether it be in Myrtle Beach, South Carolina or neighboring areas – opportunities where we can use our expertise to help facilities manage their bottom line,” he said. “I wouldn’t say it’s a rapid growth, but it’s part of the business plan going forward.”  “… It’s unfortunately a declining market of golf. People are struggling out there and we think we can bring a very succinct set of skills to help them.”  Though there are no private clubs in its current portfolio, Mauragas said the company is open to operating them.Only golf courses are involved in the merger, but MBN and B&C are both involved in separate lodging and golf package businesses, so the new company will have the ability to wield power throughout a changing golf market.


The market has shifted in recent years toward consolidation and lower green fees.  Courses have increasingly joined management companies as package rounds have been tougher to come by, and courses have dropped rates nearly across the board since Arnold Palmer Golf Management entered the market in the summer of 2008 and greatly reduced its layouts’ fees.  Mauragas suggested National Golf Management won’t attempt to be a local bully. “Are we so arrogant as to think we can set price? We don’t have that attitude,” Mauragas said. “From Day 1 when [MBN and B&C Golf Management] started their business it has all been about Myrtle Beach getting better. We don’t think price wars or low-balling price is going to help Myrtle Beach in any way. I think we’re going to continue to find a way to stabilize pricing in a declining market.”  Merging its golf management division continues B&C’s focus away from operating businesses. In the past few years the company closed the Pavilion amusement park and sold attractions including water parks and go-cart tracks, and earlier this month it sold the Marina Inn at Grande Dunes.  “We’ll probably operate fewer businesses going forward as we try to sharpen our business focus,” B&C CEO said. “I think we’re going to be more heavily weighted toward income-producing real estate investments.”

National Golf Management Courses

Owned and operated (15)
Aberdeen Country Club
Arcadian Shores Golf Club
Grande Dunes Resort Course
Litchfield Country Club
Long Bay Club
Myrtle Beach National King’s North
Myrtle Beach National Southcreek
Myrtle Beach National West
Myrtlewood PineHills
Myrtlewood Palmetto
Pawleys Plantation
Pine Lakes Country Club
River Club
Waterway Hills Golf Club
Willbrook Plantation

Managed (8)
Blackmoor Golf Club
Farmstead Golf Links
Meadowlands Golf Club
River Hills Golf & Country Club
Tidewater Plantation and Golf
Tradition Club
Wachesaw Plantation East
Wild Wing Plantation

New medical office to open this year in Murrells Inlet

Sun News - MURRELLS INLET -- Patients needing care from several different doctors, including specialists, will be able to see all of them under one roof when a new medical office building at Waccamaw Community Hospital opens this year.  The 90,000-square-foot, three-story Waccamaw Medical Park West will house a variety of specialists, including pain management, physical therapy, endoscopy and, for the first time at Waccamaw, neurosurgeons – specialists that come through a growing partnership with the Medical University of South Carolina in Charleston. A dermatologist who would work in Georgetown County also is in the works through that partnership.  The expansion is one of several at Grand Strand hospitals as they aim to keep up with the growing demand for health care services experts predict as baby boomers get older.  
Several tenants in the new, $16 million medical center are moving from the health care offices across U.S. 17. The goal is to make it easier for patients to see multiple doctors under one roof.


“This is being done for the purpose of providing a new model of care for patients,” spokeswoman Ronda Wilson said.  For example, a patient may see a primary care physician, who wants the patient to have lab work, then a stop in physical therapy. Once all the doctors move into the new building by the end of 2012, a patient can do all that without leaving the building.  “It’s available [now] just in different places,” Wilson said. “This will provide a little more patient convenience.”  The first medical offices are expected to move into the new building in March, though officials didn’t know yet which practices would be first. The rest will move in phases.  Waccamaw, which opened in 2002 and is part of Georgetown Hospital System, kept future growth in mind when designing the new medical office building. There are roughly 40,000 square feet that hasn’t been claimed yet, including a sprawling 15,000-square-foot space on the third floor. Based on Waccamaw’s previous growth, officials don’t anticipate that space will stay empty for long.

“We had a space like that [at Waccamaw Community Hospital] but not for very long,” Wilson said, looking at the available space on the third floor.  The shell of the building is complete, with workers this week busy in what will become a parking area and inside the building painting and doing other cosmetic work. The building, which has two main doors, has a massive physical therapy room on the second floor with windows overlooking U.S. 17 and a pain management clinic. Imaging, neurosciences, gastroenterology and orthopedic will be on the first floor. And there’s room to grow.  “At the rate you see us moving…we are just leaving ourselves plenty of options,” said Rod Softy, construction manager for Georgetown Hospital System.

The new center reflects a medical services boom across the area.  Waccamaw also added 56 medical-surgical and inpatient rehabilitation beds, Grand Strand Regional Medical Center in Myrtle Beach added a cardiac wing in the fall, and during the summer, Seacoast Medical Center in Little River added 64,000-square-feet and 50 patient beds. Brunswick Novant Medical Center opened a new 250,000-square-foot hospital with 74 beds during the summer.  Officials are particularly excited about the arrival of neurosurgeons at Waccamaw who are specialized in operating on the brain, head, neck and spinal cord. “Right now we don’t have that. It’s not available,” Wilson said.  The hospital system can provide that specialty through a growing partnership with MUSC. The medical office building model is one MUSC favors, with another one under construction in Mount Pleasant, said Jack Feussner, MUSC’s executive senior associate dean of clinical affairs.

“Georgetown hasn’t had a large medical office building where a lot of multiple specialties could be co-located,” Feussner said. “A patient will be able to go to one place and be able to see all the physicians they need to.”  Georgetown also is working with MUSC to bring a dermatologist to the area, which Feussner said should happen in the next four months. The two have started a joint strategic planning process and have talked about using the hospitals in Georgetown for residency training for some of the MUSC grads, Feussner said.  Wilson isn’t sure what will move into the space on the east side of U.S. 17 once many of those practices relocate the new building, but with the growing health care demand along the Grand Strand, she doesn’t expect it to stay empty.  “My suspicion is people are lining up for the space,” Wilson said. “I would expect something to go in there pretty quickly.”

B&C sells Marina Inn in Myrtle Beach

Sun News - The Marina Inn at Grande Dunes, which opened in 2006 along the Intracoastal Waterway, has new owners that plan to keep the hotel running as a AAA four-diamond property.  The Vista Group Of Companies, which owns and operates hotels, resorts and other commercial properties, bought the 230-room hotel Thursday from Burroughs & Chapin Co. Inc. Vista plans to keep most of the hotel’s employees and will continue to operate it as an upscale property, said Amin S. Visram, Vista’s chief executive officer. The property sold for about $4.9 million, according to Horry County property records.

Vista is in an acquisition mode and had wanted to have a property along the Grand Strand, Visram said. This is Vista’s first property in South Carolina.  “It’s a beautiful area, the Grand Strand community is a phenomenal community and we want to have a presence there,” he said.  Marina Inn guests aren’t likely to notice many changes under the new ownership, Visram said. The Marina Inn is one of a handful of Myrtle Beach lodging providers to have four diamonds, which means a property must be upscale in all areas, have a variety of amenities and a high degree of hospitality and service, according to AAA.

“It’s a pretty new project,” Visram said. “It’s not something you would change. Certainly it has been built very well.”  B&C, which developed the Marina Inn as well as the rest of Grande Dunes, sold the hotel so it could focus on other goals, Jim Apple, B&C’s president and chief executive officer, said in a news release.  “The Marina Inn is an important part of the Grande Dunes resort community,” he said in the release. “However, it is the only hotel we operate, and it doesn’t fit within our strategic plan. With Vista’s acquisition, we can concentrate our resources on our core businesses.”  Vista, which is headquartered in Binghamton, N.Y., and has offices in Kitchener, Ontario, Canada, owns 11 hotels with a total of about 2,550 rooms, including the Marina Inn, with other properties in Florida, New York and Canada. It also operates three shopping malls and two retirement homes in Canada, as well as office and medical buildings in Canada and Florida, according to the company’s website.

PKF Releases US Hotel Report

PKF.com - While many hoteliers are feeling angst and uncertainty caused by intimidating macroeconomic conditions, PKF Hospitality Research (PKF-HR) is assertively forecasting the continued recovery of the U.S. lodging industry. How well you do in 2012, however, will vary depending upon the price of your room and where you are located. According to the recently released December 2011 edition of Hotel Horizons®, PKF-HR forecasts that rooms revenue (RevPAR) for U.S. hotels will rise 8.1 percent in 2011, and increase another 6.1 percent in 2012. 

Analyzing the performance of U.S. hotels in 2010 and 2011, we have seen the progression of indicators that one would expect during an industry recovery. Occupancy levels increased in 2010, followed by real average daily rate (ADR) growth in 2011. The only surprise has been the pace and magnitude of the surge in hotel demand. 


Click on the link below to read more....
http://www.pkfc.com/en/pkfhome/FreeStuff/Newsletter/December-2011-PKF-Forecast-Better-For-Some.aspx

Supermarket Chain Winn-Dixie to be Sold to Bi-Lo

The supermarket chain Winn-Dixie is being sold for $560 million to Bi-Lo LLC.  The combined company will have about 690 stores and 63,000 workers in eight states in the southern U.S. Winn-Dixie Stores Inc. will become a privately held subsidiary and its ticker will be removed from the Nasdaq. Each Winn-Dixie stockholder gets $9.50 per share in cash, a 75 percent premium to the Jacksonville, Fla. company’s Friday closing stock price.  Bi-Lo, based in Greenville, S.C., runs 207 supermarkets in North Carolina, South Carolina, Georgia and Tennessee.  Winn-Dixie runs about 480 grocery stores, including approximately 380 in-store pharmacies, in Florida, Alabama, Louisiana, Georgia and Mississippi. It has about 46,000 employees.  The companies said Monday that no store closings are expected and the name Winn-Dixie will remain. 

Third zipline course proposed for downtown Myrtle Beach

Sun News - Two local businessmen want to see people soaring over Withers Swash as they ride a mechanized zipline-style chair attraction they are proposing to build on the South End of Myrtle Beach.  At Wednesday’s Downtown Redevelopment Corp. meeting, Chris Trout, one of the owners and the general manager of the Sky Wheel, presented a plan to build a moveable zipline inside the grounds of Family Kingdom.  He and Bill Prescott, who owns the Slingshot and other downtown attractions, have joined forces on this new venture, and want to make the 400-foot line traverse Withers Swash and the go-kart track on Fourth Avenue South. Instead of each rider being harnessed to a zip line, though, each would sit in a chair with safety belts, and get a speed-controlled round-trip ride up to 60 feet in the air. Unlike a zipline course, there would be no stairs to climb to get to the line.


Redevelopment agency Executive Director David Sebok said he thought it was a good idea to get feedback from the redevelopment board before the proposal moves on to the City Council for approval. The council will have to consider whether to grant Trout and Prescott the right to use the city’s air space and rights of way.  The council usually asks what other stakeholders think of a project, Sebok said, and now Trout and Prescott will be able to answer that question.  The board unanimously approved supporting the project, although there was some discussion about whether riders would be restricted from carrying items with them on the ride, as zipliners are.  "I think one concern (for the City Council) is going to be the amount of trash that ends up in the swash,” said board member Chuck Martino, himself a former City Council member. 

If this new plan is approved, it will be the third zipline-style adventure ride for Myrtle Beach. The other two, owned by Myrtle Beach Adrenaline Adventures, are being placed on the smaller lot of the former Pavilion site, and in a vacant lot on the South End of Ocean Boulevard between Damon’s restaurant and Springmaid Pier. Those two courses are in the construction and permitting process now, and their developers plan to be open for the peak summer season, as do Trout and Prescott.  In other business Wednesday, the board unanimously voted to pay about $25,000 for decorative paving on the large lot of the former Pavilion site downtown, which this year will be used for Coastal Uncorked’s tasting arena. The food-and-wine festival, now in its third year, is abandoning its tasting trolleys for a stationary tasting area, and proposing leasing the former Pavilion site for the late-April event.

The plan calls for food and wine tasting tents and a temporary stage with about 500 chairs, plus the paved area that the redevelopment agency will pay for. The hope is that other groups will want to use the paved area once Coastal Uncorked is over, and Sebok said he has had inquiries from groups that are considering wine-tasting events and a Native American powwow.  “I think it’s a good thing for downtown,” said board member Karon Mitchell, who owns the Chesterfield Inn, among other properties along the boulevard.  Board member Taylor Damonte, director of the Clay Brittain Jr. Center for Resort Tourism at Coastal Carolina University, said the board should support Coastal Uncorked. His center has performed economic impact studies of the festival, and conservatively, he said, it has a $3 million direct impact on the city.  "If they want a $20,000 paving pad to make the site more usable,” he said, “it’s a no-brainer.” 

The redevelopment staff is also considering asking the board to pay for electricity and water at the site, so that even more groups could use it.  The paving will all be removed when the property is redeveloped, but landowner The Burroughs & Chapin Co., Inc., has not said when that will happen. In the meantime, the company is leasing the property for a variety of uses, from festivals to the traveling display of the Vietnam Memorial Wall that has come to town for Veterans Day.  The board also voted unanimously in favor of enhancing its storefront-improvement loan program. As it stands now, property owners can borrow up to $15,000 to make improvements to their building facades. But since the program started in 2001, only three property owners have used the loan program. Redevelopment Executive Assistant Koribrett McKeithan said that’s partly because the cost of improvements designs can be prohibitive.  Board members agreed to give grants of up to $2,000 to pay for the designs, on top of the loans. The board has $48,000 set aside for loans, which are given out on a first-come, first-served basis.

Harrelson Boulevard exposes everyone to airport expansion

Sun News - Now that the Harrelson Boulevard extension is finished and open, drivers crossing from Kings Highway to the U.S. 17 Bypass via that highway can see a sight they probably couldn’t have before -- the terminal expansion project at Myrtle Beach International Airport.  And that $118 million expansion continues to move ever closer toward its January 2013 opening date.  Lauren Morris, marketing director for Horry County Airports, said the work remains on budget and moving along. Both Harrelson Boulevard and the aircraft rescue and firefighting facility are finished, with the 27,000 square-foot ARFF building coming in at a budget of $4.2 million. It is adjacent to the existing airport terminal.  As for future work, Morris said two airport boarding bridges will be replaced this spring, ahead of the summer tourist season.

New life coming to former Waccamaw Pottery near Myrtle Beach

Sun News - An investment group has bought the property known as Waccamaw Pottery with plans to revive the former shopping hub by cleaning up the area and luring new stores, restaurants, entertainment venues and other tenants.  The property off U.S. 501 at Fantasy Harbour, once slated for demolition before the recession to make way for new development, is getting new life under the new owners, 3W LLC, a firm registered in New Jersey that is made up of Chinese and American investors. The firm bought the 52.29 acres from General Electric Credit Equities for $7.5 million, closing the deal on Dec. 30, according to Horry County property records.  “We will gradually bring this thing back to life,” property manager Martin Durham said, sitting in an office in one of the mall buildings. “We are hoping to, over time, open everything back up.”

The change in ownership is the first step in reviving an area that has taken a few hits in recent years, businesses in the area said, with the twice-failed theme park still sitting idle and the lack of attention to keep up the Waccamaw Pottery property, which has spawned more weeds and broken windows than tenants in recent years. Crews already have pulled weeds and boarded up broken windows in the past few weeks, and area businesses have noticed – welcoming the change to a property they say looked abandoned and scary.  “Aesthetically, it is already looking better,” said Holley McMillen, sales manager at the Clarion Hotel and Conference Center across the street from Waccamaw Pottery, also once known as the Waccamaw Factory Shoppes. “It’s a relief. Any kind of good activity over there can only help this area. This area has really been hit hard lately.”  The buyers found the property appealing because it is in a highly visible location off U.S. 501 – one of the main roads tourists take into Myrtle Beach – and the building is structurally sound, said Alain Wizman, director of commercial real estate for Keller Williams who represented 3W in the deal. Wizman had been working with the group for about a year, but said a trip to China in September with Myrtle Beach Mayor John Rhodes impressed the buyers and helped seal the deal.

The buyers plan to spend about $1 million rehabbing the property, but the transition won’t happen overnight, Wizman said. Keller Williams also is handling leasing of the roughly 600,000-square-feet of space.  “They felt this held a tremendous amount of potential,” Wizman said. “They feel it was a property that could be turned around into a premium product.”  The first new stores could be open by the summer, though it likely will take two years before the buildings known as mall 1 and mall 2 are reopen, Durham said, adding that at least half of the space needs to be filled before it’s viable to open that interior space. The goal is to fill the spaces along the exterior of the property first.  Officials aim to get a mix of tenants, including clothing stores, restaurants, nightclubs and venues with an international flavor, Wizman said.  The shopping complex also will get a new name, one that will incorporate “Waccamaw” to capture the history of the area, he said. Details of the project, including the name and what the renovations will look like, are still being developed.  But the first step is cleaning up the property, which hasn’t been kept up in recent years. That includes landscaping to rid the place of overgrown weeds, fixing broken windows, pressure washing, painting and working on the roof, Durham said. On Thursday, landscaping crews were working in the parking areas.  “This place has had no attention for four or five years,” Durham said. “It was just sort of idle. Everything was idle here.” 

The property hasn’t been kept up since about 2008 when the previous owners – also investors in Hard Rock Park – abandoned plans to tear down the mall buildings to make way for a mixed-used development dubbed “Paradise City” and tied into the theme park next door. The theme park only lasted one summer as Hard Rock Park, and the investors abandoned their plans to redevelop the mall property once the park shut down in 2008. The mall was only renting month-to-month and needed some TLC.  “I’m ecstatic,” said Jay Coley, a co-owner of Imaginations costumes and dancewear, one of three tenants at the shopping complex. “It’s exciting to know this won’t be desolate anymore. We won’t have to describe this as being an abandoned mall anymore.”