Apartment construction and planning in the Wilmington area continues to grow along with the demand for new units, developers and brokers say, a trend expected to continue in 2015.
Soon, a Carolina Beach Road project made up of 241 units will join a growing list of apartment
communities under construction.
“This has been pending for quite some time, but it’s finally going forward,” said Richard Cotton, a broker involved in the sale of land for the Carolina Beach Road project, Meridian at Fairfield Park.
NorthView Partners, a Raleigh-based firm and development partner in Meridian at Fairfield Park, expected to close on a construction loan around Dec. 15 and begin site work as soon as possible, said Mark Barker, CEO and principal of NorthView Partners.
Although it took a while for the project to come to this point, the lag has a bright side, Barker said, in that it generally takes about a year to deliver the first units of an apartment project.
That puts the Meridian at Fairfield Park, which is part of a mixed-use project, in a good position for the spring 2016 leasing season, Barker said. Lease rates for the one- to three-bedroom apartments could be in the $700 to $1,300 range, he said.
Cotton, managing director of Multifamily Realty Advisors, compiles quarterly reports for the Wilmington and Triangle apartment markets, and said he expects the exceptionally strong demand for new apartments in the Wilmington area to continue next year.
“I think what we have here is a situation where we’re kind of making up for lost time,” Cotton said, explaining that few new apartments came to the market from 2009 to 2011.
Despite the lack of new apartments in those past years, “People have continued to move to the area,” he said, and many want to rent a place rather than buy, at least at first.”
In Wilmington, more than 1,300 apartments in eight communities were at various stages of construction as of Sept. 30, according to the Multifamily Realty Advisors third-quarter report, and more than 1,800 units were part of nine proposed projects.
Apartment projects completed as of Sept. 30 resulted in the addition of 739 units, while apartments under construction in the third quarter were expected to deliver 1,361 units.
One of those projects is Stephens Pointe, where tenants were expected to move in starting the week of Dec. 15 to the first completed building of eight planned, each containing 24 units.
Leasing activity for Stephens Pointe, for which the developer was MFH Construction and the builder McAdams Homes, has been “very good,” said Tara Marley, Stephens Pointe community manager.
“Our first building is just about full,” Marley said Dec. 12. “We’re halfway through the second building and working on a quarter of the third.”
It helps, Marley said, that the community is located in Wilmington’s Porters Neck area, which seems to be growing rapidly. All eight buildings at Stephens Pointe are expected to be complete by summer 2015.
For the market as a whole, the Multifamily Realty Advisors report says, the average occupancy rate is currently around 94.5 percent, with the average rental rate at $835 per month. New apartments (in the 1- to 5-year-old group) had the highest average rents at $1,343 per month with the lowest vacancy at 3.9 percent.
“The absorption rate so far has been good, and I expect it to continue,” Cotton said.
People in the market for an apartment tend to flock to the newer units, he said.
“I think that existing older units will have difficulty competing with these very new, upscale, state-of-the-art apartment communities that are being built,” he said.
But even with a number of new units on the way and more proposed, “I do not think the Wilmington market is at risk for being overbuilt,” Cotton said. “So far, there’s no indication of that.”
Aside from Meridian at Fairfield Park, another eight projects had been proposed as of Sept. 30, and five of the nine plans, including two apartment complexes for downtown Wilmington, include more than 250 units.
Wilmington area apartment projects proposed (as of Sept. 30)
Sawmill Point Apartments
Location: Riverfront at Sawmill Point Marina, downtown Wilmington
Units: 278
Pier 33 Apartments
Location: Riverfront overlooking new Port City Marina, downtown Wilmington
Units: 301
Ellington Farms Apartments
Location: 6469 Gordon Road
Units: 96
Porters Neck Crossing
Location: Porters Neck Road off Market Street
Units: 273
Solstice Lofts (student housing)
Location: Kerr Avenue and Randall Parkway
Units: 54
Meridian at Fairfield Park
Location: Carolina Beach Road near Echo Farms
Units: 241
Gallery Park Apartments
Location: Independence Boulevard and 17th Street
Units: 258
Independence West
Location: Independence Boulevard near Carolina Beach Road
Units: 256
Abbington Oaks
Location: Southport-Supply Road, Southport
Units: 72
