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Real Estate - Residential

Report: Apartment Occupancy Rate Stronger Than Expected In Wilmington

By Cece Nunn, posted Jan 13, 2017
A rendering shows a three-bedroom unit at Myrtle Landing Townhomes, a Tribute Companies project at 7216 Myrtle Grove Road where units are available for lease. (Courtesy of Tribute Companies)
By the end of last year, 4,000 apartments were under construction or planned in the Wilmington area, according to a recent report.

That's more than the total completed, 3,554, from 2013 to 2016.

The latest Multifamily Realty Advisors Apartment Market Update, analyzing 2016 apartment activity and sales, shows more than 2,200 apartments under construction and another 1,900 proposed in the Wilmington area. 

"The overall occupancy rate for the Wilmington apartment market is currently 95.4 percent according to Real Data Apartment Index, up from 93.9 percent one year ago. Occupancy is much stronger than anyone could have expected, given the number of new units delivered over the past two years," said the report, compiled by Richard Cotton, managing director of Multifamily Realty Advisors and a commercial broker who specializes in the sale of apartment communities and apartment development sites.

Of the 1,900 proposed, a plan for 155 student housing units - a total of 600 bedrooms - on Oleander Drive was shot down by the Wilmington Planning Commission in November, in a unanimous vote against a needed rezoning.

As far as city officials know, the plan by Capstone Collegiate Communities for 38 duplexes and townhomes in a community called The Cottages at Wilmington is off the table for now, after the commission's decision. But efforts to reach Mike Baker, executive vice president of development for Capstone Collegiate Communities, to ask about the status of the project have not been successful. 

Neighbors opposed The Cottages project, according to news reports last year.

A different project with a multi-family component is currently embroiled in a major conflict between the developer and adjacent property owners. According to the proposal, The Woodlands at Echo Farms would replace the Echo Farms golf course with 240 multi-family units, 171 single-family homes and 125 townhomes. The plan and resident opposition are involved in a lawsuit and upcoming city meetings.

But despite some push-back from neighbors and others who are opposed to some aspects of the local apartment boom, construction and demand continues in Wilmington as in other cities. In Charleston, South Carolina, for example, 6,000 units are in the pipeline, and in Charlotte, that number is 20,000, said Glenn Harbeck, the city of Wilmington's director of planning, development and transportation.

Nearly 20,000 are also under construction or planned in the Triangle, according to the Multifamily Realty Advisors report.

Harbeck said eventually, the rising apartment demand in Wilmington will come to an end.

In the meantime, apartment owners are in lease-up mode. Wilmington-based Tribute Companies, which manages more than 5,000 units in North Carolina and South Carolina, is working on leasing new units at three projects under construction - Arbor Trace Apartments, a 184-unit community at 2440 Salinger Court off Carolina Beach Road; Myrtle Landing Townhomes, a 144-townhome multi-family project at 7216 Myrtle Grove Road near the Intracoastal Waterway; and South Front Phase II, 55 units across Greenfield Street from Phase I of South Front Apartments.

With new apartments come new standard features. At Arbor Trace, the units include designer cabinetry, plank-style flooring, tiled showers, washers and dryers and stainless steel appliances, according to a news release from Tribute Companies. 

"The community will feature a clubhouse with a pool, state-of-the-art fitness facility, outdoor grilling kitchen, pet wash station, and a bark park," the release said.

The buildings at Myrtle Landing Townhomes, which includes 96 three-bedroom and 48 two-bedroom units, "have a traditional design with cedar shake siding, dark green and pale blue doors, front and back porches, with blue painted porch ceilings." In addition to the usual amenities, the community also has a community car wash, walking trails, and "plenty of natural green space," the release said.

As apartment buildings rose in 2016, rents did the same.

"Rent growth has also been very strong with same-unit rents increasing by 4.2 percent over the past year compared to 3.7 percent over the prior year. The average apartment rental rate for the entire market is now $954 per month or $1.04 per square foot. Apartments in the 1-5 year age group have the highest average rents at $1,421 per month or $1.39 per square foot, followed by apartments currently in lease-up with average rents at $1,229 per month or $1.17 per square foot.," the Multifamily Realty Advisors report said.
 
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