Orange County can create more opportunities for jobs and diversity by addressing a continuing need for commercial spaces and homes, officials said at the annual “Spaces & Places” briefing.
Aaron Nelson, president of the Chapel Hill-Carrboro Chamber of Commerce, focused last week’s conversation on the county’s commercial development and single-family housing numbers over the last 18 months, compared with Durham and Chatham counties.
Chapel Hill has room to grow, said Dwight Bassett, the town’s economic development officer.
There’s now 2.4 million square feet of office space and about 2 million square feet of retail space, he said. The vacancy rate for office is 8 percent to 9 percent, while the retail vacancy rate is at 6 percent.
The potential is to add 1 million-plus square feet of office and nearly as much retail space, he said, plus over 3,000 housing units and up to 6,000 hotel rooms.
A stronger relationship with UNC is important, he said, and the Town Council also drafted a Commercial Development Strategy last summer aimed at competing with other cities known for research and development, such as Boulder, Colorado. The chamber will lead an inter-city visit there in September.
“This was not a casual destination that we arrived at,” Bassett said, citing several plans and studies. “Each one of those efforts are strategic moves to help us accommodate that market as we move forward.”
It’s been a good year to sell single-family homes, continuing the growth in 2015, real estate professional Mark Zimmerman said at Thursday’s briefing.
Orange, Durham and Chatham counties reported “good steady growth” of about 9 percent over the last 18 months, he said. Orange and Chatham have surpassed historic highs reached in 2006, while Durham is closing in on that marker, he said.
“All this means fewer days on the market when you’re trying to sell your home, multiple offer situations, lots of disappointed buyers and ... higher prices as well, as you would expect in a seller’s market,” Zimmerman said. (Editor’s note: Zimmerman writes a monthly opinion column for The Chapel Hill News.)
There’s a limited number of new homes in all three counties, but Durham and Chatham are building to meet the demand, he said. Durham added 600 new homes in the last year, and Chatham added 588. Orange County only added 177 new homes.
The county’s new home prices, however, are outpacing its neighbors, he said.
Orange County’s average new home sales price is over $400,000, he said, with the average home staying on the market for 4.6 months. The average sales price in Durham is $245,000, at 2.1 months on the market, while Chatham new homes average $393,000 at 5.4 months on the market, he said.
The downside is rising new home prices also lift older home costs, he said, noting that if that continues, middle-class residents won’t be able to afford it either.
Chatham has three high-impact industrial megasites under development – the 1,800-acre Chatham County-Siler City Advanced Manufacturing Site and the 2,700-acre Moncure Merry Oaks site – and plans for thousands of new homes, said Kyle Touchstone, president of the Chatham Economic Development Corp.
The U.S. 15-501 corridor from Chapel Hill to Pittsboro is growing, he said, with a new storage facility, renovated and new shopping centers; and two huge communities, Briar Chapel and the future Chatham Park. It’s not Orange vs. Chatham anymore, he said.
“We need to make sure we are retaining our graduates, keeping them here, making sure that we have jobs for those graduates and, of course, places for them to live,” Touchstone said.
▪ Briar Chapel: The 1,589-acre community now includes Veranda, a six-acre commercial center with a preschool and care center. The next big piece will be 500,000 square feet of retail, restaurant, office and educational space on 30 acres. The developer is working with Central Carolina Community College to build a health sciences facility by 2018.
▪ Chatham Park: 7,100-acre community could bring 50,000 residents, 22,000 homes and up to 60,000 jobs to Pittsboro over 40 years, plus 22 million square feet of retail, office, research and educational space. The first commercial phase covers 44 acres. UNC Health Care’s 25,000-square-foot medical office building is across the street and work is wrapping up on a 10-bed hospice facility.
Find a slideshow of the Spaces & Places regional development briefing at bit.ly/2bzK0Cd.
Chapel Hill growing
Several major projects are underway, including:
▪ Carolina Square: Under construction with 159,000 square feet office, including two UNC tenants; 42,000 SF retail, including a 21,000 SF urban Target; 246 high-end apartments; and a 650-space parking deck. It’s scheduled to open next summer.
▪ Glen Lennox: Grubb Properties has $27 million in funding so far and plans to start building apartments, a clubhouse, offices and outdoor recreation next summer. Full buildout – totaling about 130,000 SF retail, 600,000 SF office and 1,500 new apartments – could take a decade or more.
▪ South Creek: Formerly Obey Creek, across from Southern Village, is in an “intense marketing phase” now. Developing the 127-acre campus could start in 2017 and take at least 20 years, creating 325,000 SF retail, 224,000 SF office, 650 apartments and 140 hotel rooms, plus an 80-acre public park.
▪ Ephesus-Fordham: The first seven-story building, Alexan Chapel Hill, could open in the redevelopment district this fall with 265 apartments and 15,000 SF retail; road construction is underway at Fordham Boulevard and Ephesus Church Road; and three new buildings are going up at Ram’s Plaza and Eastgate Crossing.
▪ Carraway Village: Formerly the Edge project on Eubanks Road in northern Chapel Hill. Developer Northwood Ravin is seeking permits to start building the first phase of the 55-acre project – apartments, retail and offices – this fall. The project could total between 600,000 and 837,000 SF.
▪ Hotels: Orange County has 1,502 hotel rooms and is adding more, including Carrboro’s 150-room Hilton Garden Inn, set to open in 2019; Southern Village’s 110-room Hyatt Place, set to open early next year; and downtown Chapel Hill’s 123-room AC by Marriott Hotel, set to open in October 2017.