Retirees flock to Southeastern North Carolina, especially from the Northeast, and they’ve done so for decades for the area’s warm weather and lower taxes.
Oftentimes, they either follow friends or loved ones who have already made the move or they bring relatives and neighbors with them.
The retiree demographic, and the increase in population that results, has implications for the commercial real estate market in the Wilmington area from an investment standpoint and in the types of businesses the region can attract.
Those at retirement age make up a big chunk of the region’s population, according to Census data. In New Hanover County, the percentage of residents ages 65 and older is nearly 18%, a statistic that is right at 18% in Pender County and 31% in Brunswick County.
“I look at it as a good thing,” said Grayson Powell, managing partner of Coldwell Banker Commercial Sun Coast Partners, a Wilmington-based commercial real estate firm.
Retirees inevitably have an influence on what kind of retail and services come to a given area.
“This is who we are, so this is what we need,” Powell said of the retiree point of view. “We need restaurants, doctors, wealth managers, physical therapists, easy access to grocery stores … they tend not to want to fight traffic as much.”
Chris Bryan, general sales manager for Coldwell Banker Sloane Realty and Sloane Commercial Real Estate, agreed.
His market includes southern Brunswick County, one of many popular areas in the region for retirees looking to relocate to coastal North Carolina.
“When my residential agents show retirees residential real estate, some of the first few questions are, ‘How’s the medical care in the area?’ and ‘How far away are the medical facilities?’ in relation to the properties they’re viewing,” Bryan said. “Another one of the top questions asked by prospective retiree buyers in our market is about the selection of grocery stores and pharmacies in our area.”
When people ask why so many storage facilities are on the rise in the Cape Fear region, one answer is that some retirees, among other demographic groups, have a lot of stuff. In certain cases, they’re downsizing, but they don’t want to let go of the things they’ve gathered over decades.
“The storage facilities in our area are almost at full capacity,” Bryan said. “Several retirees that choose a multifamily property, such as a condo or townhome without a garage, are in need of additional storage.”
The number of retirees in the Wilmington area also has a bigger impact than just the commercial development it can spur.
“Wilmington has what can best be described as a ‘Florida economy,’” said Hansen Matthews, partner in Maus, Warwick, Matthews & Co. “We are somewhat geographically isolated from major cities, which have many manufacturing and distribution jobs, so our economy has evolved to where much of it is in the service, retail, tourism and institutional sectors.”
As a result, some of the people who buy or rent homes here upon retirement or close to it look for ways to create their own occupations.
“Many people move here in their 50s or 60s and they are not ready to retire, or at least ready to fully retire,” Matthews said. “We have one of the highest rates of business startups per capita in the state and much of this statistic can be tied to this age demographic.”
Age and experience can be of great benefit to the new business owner, he said.
“People relocating here bring their skill sets or their business experiences, and they are soon ready to open up shop,” Matthews said.
“Their particular ‘angle’ on retailing or service may be just the thing that differentiates them from the existing competition, and they carve out their own niche.”
Another aspect of how retirees make their mark on the real estate industry in Wilmington and surrounding communities is through investment.
Sometimes that investment can come in the form of buying commercial or residential properties.
“Some retirees will choose to sell investment properties ‘back home’ and reinvest the sale proceeds in local income properties where it’s easier for them to keep an eye on things,” Matthew said. “This is not a huge percentage of the local real estate investment market, but it is definitely a factor.”
P.J. Doherty, a broker with Carolina Commercial Investment Properties, said half of the real estate investors he works with are retirees.
“A retiree wants steady cash flow,” Doherty explained. “It’s not about wealth appreciation at that point. It’s about generating a monthly income for them, to use their life savings to create a monthly income for them to live on.”
He said some market factors are helping to drive that trend.
“Interest rates are rock bottom, so that stretches your dollar,” Doherty said. “You increase the rate of return on your investment by borrowing money at really cheap rates, which the market offers right now. There’s also a plethora of tax benefits.”
Retirees looking for investment income make choices based on a number of factors, but one is very clear.
“They have a tendency to invest in what they know,” Doherty said. “For example, one of my clients was an apartment developer who now invests in apartments. Another one of my other really great clients made his money with an industrial business in New Jersey so industrial properties are his choice.
“I think it’s really what they feel comfortable with,” he added. “There’s benefits and drawbacks to all of those. Some of them are more recession proof. Like Dutch Square flex space is typically kind of recession proof because when companies have to downsize that can be an outlet for them, with smaller spaces that are typically a lot less expensive.”
Retirement Special Section: