Q2 2012 Greensboro/Winston-Salem, North Carolina Commercial Real Estate Economy

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Q2 2012 Greensboro/Winston-Salem, North Carolina Commercial Real Estate Economy

Technically, the Greensboro/Winston-Salem metro area in North Carolina’s inland Piedmont region is composed of three separate Metropolitan Statistical Area’s (MSA)—Greensboro-High Point on its east side, Winston-Salem on the west side, and the smaller Burlington area in the middle. The region also is referred to as the “Triad”—but not for the three constituent MSA’s but rather for its three principal cities—Greensboro, High Point, and Winston-Salem. According to preliminary data provided by the U.S. Bureau of Labor Statistics (BLS), average non-farm employment as of August 2012 for the three MSA’s combined was up 0.7% (4,100 jobs) over 12 months. This overall total, suggesting a slow recovery by current national norms, conceals internal differences. Non-farm employment in Greensboro’s MSA was up 5,900 jobs (1.7%) year-over-year while Burlington showed a similar rate of increase even as Winston-Salem suffered a 2,700-job (1.3%) loss.

Good fortune has come in recent months to the local economy and its Manufacturing sector as the region, in the words of NAI Piedmont Triad CRES, slowly emerges from the economic downturn. At the top of the good news list is Caterpillar’s development of a $426 million manufacturing facility in eastern Forsyth County (in the Winston-Salem MSA). The project completed last November. In Davidson County to the near south of Winston-Salem TIMCO Aerosystems opened a 500-employee aircraft seat manufacturing plant in late 2011. Manufacturing employment in the three-MSA area was up 1,100 jobs (1.3%) over the latest August-to-August period. Again, however, the overall data obscure internal trends: a 1,400-job (6.1%) loss in the Winston-Salem area subtracted from the substantial 2,500-job (4.8%) increase seen over the same time span in Greensboro-High Point.

In addition, the Honda Aircraft Company broke ground in September for a $20 million, 90,000-square-foot maintenance facility at the airport, The Business Journal of the Greater Triad reported at the time. The $80 million facility will employ 417 personnel, according to NAI. And FedEx recently opened two new facilities—a $300 million Mid-Atlantic hub at the airport, a result of “expansion of a third runway,” according to NAI, and a 400,000-square-foot FedEx Ground sorting facility in Kernersville, east of Winston-Salem. Indeed, as a result of job growth and business expansion, development of a variety of types is emerging in the Kernersville area, as described in this report. “As it prepares for the onset of hundreds of new jobs during the next several years,” the Journal reported in September, “Kernersville is focusing on a long-range plan that includes expanding an already burgeoning health care sector, developing land with new housing and possibly offices, as well as improving the look and feel of the downtown core.” A new VA health care center— “a game changer” for the city, its mayor informed the source, and a planned expansion by Hitachi-Deere, are expected to add to the Kernersville area employment rolls.

Recent reporting on the region’s housing market suggests emerging stability. “Sales of new and existing homes in the Triad remained relatively flat during the first six months of this year compared to that time period in 2011, suggesting that the local housing sector is slowly stabilizing after years of double-digit declines,” the Journal reported at the end of August. The market, however, may not yet be out of the woods: “real estate industry officials warn that high unemployment, a glut of unsold homes and strict lending requirements could inhibit the market’s performance during the remainder of the year,” adds the report. “I think we have got to get those jobs back before the housing market begins to move forward in a strong direction,” a local economist citing the “high” unemployment rate, informed the Journal. The median selling price for first half 2012 was $150,000, up 3.4% year-over-year. The number of sales closed, meanwhile, remained essentially flat.