Cabarrus County Development: The Hot Spots
Sep 01, 2018 08:30AM
By Jason Huddle
Cabarrus County Development: The Hot Spots
What areas of Cabarrus county are jockeying for position in the race to the top in commercial development? THAT DEPENDS ON WHOM YOU ASK.
Cabarrus Magazine spotlighted the county’s employment leaders as well as the Cabarrus Economic Development’s (EDC) workforce development initiatives in its June issue. But what’s down the pipeline, who is “shopping” the area for possible development and what types of development are most in demand?
In its June monthly re-cap, the EDC added 10 new development projects to its “active” list for a total of 61. Of those, 29 fell in the manufacturing sector, 11 in office/headquarters, seven in distribution, four in attractions and 10 in other. That ratio was basically reflected in July.
July also saw a whopping 28 new requests for information (RFIs); a typical month yields nine. Current active projects jumped to 74.
Developers are investing $75 million to $80 million on each of these 100,000-square-foot+ projects, which are being built on an average of 28 to 36 acres. These developments will bring 182 to 207 new jobs to Cabarrus County, with the majority located in Concord, then Kannapolis, Midland, Harrisburg and Mt. Pleasant.
“As any company looking to build or relocate in Cabarrus County needs to know, there are several tax credits, competitive grants and discretionary funds available to assist in attracting business to the region,” the EDC says. “It is these types of financial incentives and training programs that help to spur growth and create jobs by establishing a healthy and competitive environment with which to do business.”
On the other side of the coin, there are developers that look hard at existing structures in key areas of the county. They’re finding that prospective tenants are eagerly at hand before upfitting is even complete.
Cabarrus Magazine spoke with three of the many Cabarrus County commercial developers to get a handle on what each perceives as being the most advantageous in development that benefits – and fits into – our region.
Fortius Capital Partners and
New Branch Real Estate Advisors
Harris Morrison is a familiar name in local commercial real estate, having served as partner in New Branch Real Estate Advisors and developer of the Old Creamery on Church Street N. in Concord.
Through his new firm, Fortius Capital Partners, LLC, he’s recently broadened his scope and is focusing on the development of, and investment in, industrial and office properties.
“Fortius is set up to join with capital partners to invest in or develop industrial and office buildings,” Morrison explains. “We align our capital with that of our partners, locate the right opportunities and manage all aspects of the real estate asset, including acquisition, development, leasing, management and disposition.”
Fortius has joined the ranks of those delving into large-scale speculative development. For its first project, it purchased 21 acres on Pitts School Road near Poplar Tent Road in Concord.
Called Meadows Corporate Park, this proposed 192,000-square-foot Class-A industrial park is “catering to the medium-sized tenant: 16,000 to 40,000 square feet with a modest office component,” Morrison says. “Spec building is risky but it increases the tax base and attracts good-paying jobs. This type of development is different because it’s attracting small to medium-sized companies, a segment which is underserved in this submarket. The market demand is robust so you can sometimes lease before it’s completely built.”
When asked what areas of Cabarrus County are currently hot with regard to commercial development, Morrison says, “It’s really the southwestern part of the county; areas like Harrisburg are hot. Land availability varies, but it’s areas closest to the interstate.
“The part of Concord growing the most rapidly is that area near I-85 and westward. Highways, interstate improvements and available land are big drivers of industrial growth,” he adds. “We’re no longer just another suburb and the expansion of I-85 has really integrated Cabarrus County with Charlotte. The completion of the I-485 loop has made commuting much easier.”
Morrison also sees strong residential development. “There is a lot of townhome development and a rise in senior communities. For example, there are senior duplexes on George Liles Parkway,” he notes.
“While there’s plenty of competition out there, we are optimistic about Meadows Corporate Park because it’s different; fortunately, we’re in the Charlotte MSA (Metropolitan Statistical Area), a very strong and diverse market.
“The future is bright in the whole region, especially Cabarrus County, and we couldn’t be more thrilled to deliver Meadows Corporate Park to this market,” Morrison adds. “We’re always looking for other industrial and office opportunities in Cabarrus and across the Carolinas.”
Locus Real Estate Brokers & Advisors
Ed McAfee is president and CEO of Locus Real Estate, located at 300 McGill Avenue in Concord. He, Zac Moretz and staff concentrate their real estate services on commercial, retail and investment properties in Cabarrus and Rowan counties, but also serve residential. In addition, they represent clients in the leasing of commercial and industrial properties.
Locus has also been drawn to working with developers utilizing historic tax credits in the redevelopment of buildings in downtown Concord, converting them to residential living spaces.
“Our firm works with the buyer to identify the right type of property to grow the real estate investment portfolio and to keep it balanced so you are not putting all of your eggs in one basket,” McAfee explains. “Just as you would not invest in just one company’s stock, we help the buyer to diversify in real estate investments.
“We are also working with investors who are buying up commercial and multi-family real estate throughout the county as the frenzy continues to ‘get it before it’s gone.’ ”
McAfee sees the county as a whole developing at a phenomenal pace, but singles out Derita Road. “The Concord Airport corridor is on fire with large spec warehouse spaces coming out of the ground quickly, and large logistics companies are landing in this area,” he says. “Speculative building is the new trend in town. From 200,000-square-foot+ warehouse projects to retail centers and even housing, it seems like everyone is behind the pace of demand and supply is low. Most projects I have been involved with recently are nearly 100 percent committed by the time they are completed.”
One such development is Concord Airport Business Park, located adjacent to Concord-Padgett Regional Airport. Developed by Basking Ridge, NJ-based The Silverman Group, the park joins the massive development on Derita Road, stretching from Concord Mills Boulevard to Poplar Tent Road.
Situated on more than 170 acres and zoned for industrial, phases I and II have been finished and are completely leased. The firm is now working on Phase III, investing $56 million in this 1.5 million-square-foot final phase.
Once again, location dictated this explosive growth with such close proximity to Concord-Padgett Regional Airport, I-85/I-485, Charlotte Motor Speedway and the city of Charlotte.
Referring to speed of construction versus demand, McAfee says, “The bottleneck seems to be with not enough contractors who are in high demand driving prices of construction up to record pricing, which slows the pace of development. If we do not have a serious offset in our economy, I predict that this area will become the fastest growing area in the country within the next few years.”
McAfee agrees with Morrison in one reason developers and investors are so drawn to Cabarrus County: roads. “My theory on this shift of growth and development to the I-85 corridor now stems from the near completion of the I-85 lane expansion all the way to Salisbury, and the focus of developers steering away from the traffic and toll road issues of the I-77 corridor; they are now focused on the I-85 corridor for abundant opportunities.
“Land and development costs are more reasonable in Cabarrus County as well. There is an abundance of available land that is reasonably priced in Cabarrus County, from multi-family, retail and industrial zonings, so we are in a perfect storm situation with lots of opportunity and an exploding market.”
McAfee points to multi-family as a hot segment of commercial development. “We just listed a five-plex residential investment property that caused a feeding frenzy atmosphere that drove the offers to above the listing price and sold quickly,” he shares. “I could sell 10 more of this kind of product right now in this market if I just had the inventory. Investment properties are flying off the shelves and it is a great time to list your investments to maximize your gains.”
Add to that small industrial space development because of a shortage of inventory right now.
“I spend a lot of time with people who are from other parts of the country that are looking to capitalize on the opportunities here in Cabarrus county and they all tell me of the value they see in the properties in this area,” McAfee says. “I don’t believe we will continue to see this magnitude of opportunity in the future and there will be a lot of talk about ‘would haves, could haves and should haves.’”
Rowan Rock & Timber
Julien Booth used to be one of those commuters making the trek to Charlotte from Cabarrus County every day after he founded Forest Capital Corp. more than 14 years ago. However, he realized the merits of working where he lives and opened a Concord office for the firm.
“I became more productive when I didn’t waste two hours a day commuting to Charlotte,” Booth says.
In 2012, he established Rowan Rock & Timber (RRT), a commercial real estate development company that targets what Booth calls “distressed” properties – those that have seen better days but can play a role in revitalizing various communities in Cabarrus and Rowan counties.
As its principal, both companies are now located in the former Niblock headquarters building on McGill Avenue in Concord, property that RRT purchased and also leases to a handful of business tenants. Once the corporate offices for Gibson Mill – directly across the street – RRT has reinvented the space, much like it does in the world of commercial development.
“RRT uses a two-pronged approach in deciding which projects to pursue, whether commercial, residential or industrial,” Booth explains. “First, we seek out projects that will improve existing infill real estate. Second, we focus on adding value to communal-based, underutilized assets – regardless of type. About 70 percent of what we do is infill-based, existing projects.
“We focus on where we can get dirty. It pains me to see good assets stranded. The value proposition is that we do the work ourselves. We are hands-on; investing for our own account equals skin in the game. Those savings get passed along to tenants.”
For example, 140 Cabarrus Avenue W., originally a grocery store and then most recently an educational reading center, became available in 2015. Sitting on an acre across the street from Barber-Scotia College, RRT transformed it into a multi-office commercial building whose potential tenants were lined up before construction was finished. It remains fully leased.
RRT currently retains about 20 commercial properties in a portfolio that Booth terms “Concordish,” meaning in and around the Highway 29 corridor. He also likes the potential of Gibson Village. “We acquired a lot of new assets in 2016 and are currently working through the inventory,” he says.
Patience is key when it comes to this value-based development. “We’re diversified among property types,” Booth says. “The opportunity reveals itself sometimes years after you buy it. We’re trying to figure out what the niche is in the market and we’re flexible enough to adapt.”
Even more opportunities will likely become available to the company once the I-85 expansion northward is complete. “We have, kind of, two companies,” Booth explains. “One focuses on agriculture and forestry. Then the other is community development. They kind of cross over sometimes. As I-85 opens up, the farmland we accumulated five miles from the interstate will be positioned for residential development.”
In the meantime, RRT is working on 22 Union Street N. – the former Concord Theater – which it purchased from Rehab Development. Its nearly 20,000 square feet are being upfit for Carolina Interiors, which was closed in downtown Kannapolis due to the revitalization project there.
Then there’s the vacant parking lot next door to its own headquarters, part of three total acres. “The building ‘carries’ that extra land,” Booth says, referring to the financial management of the parcel up to this point.
Now that lot is being transformed into Rowan Rock Retail Center, a single-user or multi-tenant retail building with 1,000 to 8,000 square feet available for build-to-suit. Booth calls it “a not-so-secret project that will complement RRT’s mission.”
“The goal of every project is to fully integrate individuals/families moving to the area, into the community, in a seamless manner,” he says. “Our research shows that attracting new residents as well as resident retention correlates directly with smart economic development. This new project is focused on effective ways to directly connect new residents with resources, businesses and opportunities across the city. We at RRT are excited about all of our upcoming projects.”
Booth calls Concord a wonderful town to build a life, saying, “The overall goal of RRT is to reinvent, rebuild and reinstall Concord’s potential. We appreciate its history and believe in its future. I’m excited for the prospects of Concord. We’re very invested here. We look forward to seeing the overall growth and development of the Cabarrus region and hope to play a part in its success.”
Article By: Kim Cassell
Photos Courtesy: Avison Young, Fortius Capital Partners and Michael A. Anderson Photography