CarterBlog

Carter CEO Talks Multifamily with SmartMoney Reporter

By Mary Kathryn Kennon, marketing coordinator, Carter

ATLANTA (Jan. 19, 2012) - In a just-published article, a national magazine from The Wall Street Journal includes thoughts from Carter Chairman and CEO Bob Peterson on investing in multifamily REITs.

In the February issue of SmartMoney, Peterson tells writer Alyssa Abkowitz that multifamily real estate investment trusts are a smart investment right now. As a group, apartment REITs are up 9 percent this year, and they're still fairly priced, Peterson says.

Peterson knows firsthand about the current apartment market and about REITs. After a great response to apartments at The Banks in Cincinnati, Carter is planning a second phase that will include more apartments at the successful mixed-use development along the banks of the Ohio River. Carter also is pursing development and investment opportunities in urban, infill multifamily developments in cities such as Nashville, Tenn.

As for REITs, Peterson is a past executive of CarrAmerica Realty Corp., a former real estate investment trust. In late 1996, Peterson sold Peterson Properties to CarrAmerica. When the transaction closed, he joined the REIT as Southeast regional managing partner and later was named president of CarrAmerica Development. Peterson also served on CarrAmerica's investment and operating committee.

The SmartMoney story quoting Peterson highlights two different ways to invest in the housing market. While Peterson recommends apartment REITs, veteran house-flipper Doug Clark says big payoffs are available for house-flippers who have the cash, do-it-yourself ability and a high tolerance for risk.

If you would like to learn more about Carter's investment strategy in multifamily, contact John Akin at jakin@carterusa.com.

Here's the SmartMoney article.

2 Ways to Invest in the Housing Market Now

Even with the broad housing market still in a funk, some investors are putting cash back into real estate.

By ALYSSA ABKOWITZ

Play It Safe: Apartment REITs

When it comes to safe investing, real estate doesn't exactly pop into mind these days. But the bust that has beleaguered builders and real estate agents has actually been a boon for many apartment owners. Vacancies are at their lowest levels in six years, and rents are on the rise nationwide. Those factors aren't stopping families -- many of them former homeowners -- from becoming tenants, says Bob Peterson, CEO of Carter, a commercial real estate company in Atlanta. The simplest way investors can capitalize: Pick up shares of a real estate investment trust, or REIT, that specializes in apartments. REITs collect the rents and then pay out at least 90 percent of their taxable income to shareholders through dividends. While such REITs as a group are up 9 percent this year, they're still fairly priced, Peterson says. Home Properties (HME: 55.52, 0.16, 0.29%) now owns about 120 properties and yields 4.6 percent, while UDR (UDR: 24.78, -0.11, -0.44%) is about twice as big and yields 3.3 percent.

Go for Broke: Home Flipping

 Do you have a lot of cash on hand? More important: Can you install drywall? If you said yes twice, then "flipping" an abandoned house could be your next big score. With the number of foreclosures still rising, there are plenty of rehab projects to choose from, and banks often sell them at big discounts. But navigating a foreclosure auction is tricky; pros say investors usually end up buying homes first, sight unseen, and inspecting them for damages later. Buyers likely then need to sink a hefty amount of time (at least six months, flippers say) and money into rehabbing the home. There's no guarantee of selling the rehabbed house for a profit, either, which is why veteran flipper Doug Clark calls it "the riskiest part of the real estate industry." But the potential payoff can be huge. Clark recently paid $1.6 million at auction for a 14,000-square-foot Utah mansion. He spent $250,000 to fix it up and expects to sell it for $3 million. Not bad for a couple of months' work.

 

Carter Continues to Bring Tenants to The Banks

By Laura Swadel, director, Carter

CINCINNATI (Jan. 12, 2012) - Carter continues to fill The Banks mixed-use development here with quality tenants, despite the tough environment for the commercial real estate industry.

Earlier this week, Carter announced that Mahogany's Cafe and Grill will open a new location in The Banks in April. Mahogany's is an upscale soul food restaurant that will increase the presence of minority-owned enterprises at The Banks. Co-owned by executive chef Liz Rogers, Mahogany's signed a lease for 3,500 square feet between The Holy Grail Banks and the spot where Tin Roof will open a location.

The Banks is an 18-acre mixed-use project rising on the banks of the Ohio River, between Paul Brown Stadium and Great American Ball Park. Carter serves as master developer of The Banks in partnership with The Dawson Co., an Atlanta-based development firm and one of the city's oldest African-American-owned commercial real estate firms.

The Banks is a prime examples of the new, narrowed focus at Carter. In December, Carter announced it would focus on successfully developing in urban locations - especially multifamily - and in investing in value-add office properties. Carter also will grow its strategic consulting and interiors businesses. 

At The Banks, Mahogany's is the latest in a string of restaurants and entertainment venues to commit to the landmark development. Toby Keith's I Love This Bar & Grill, Christian Moerlein Lager House and Tin Roof will open this winter, and Holy Grail Banks and Johnny Rockets opened to much fanfare last year.

 "The food [at Mahogany's] is fabulous. Liz is passionate about it and she's got a great product," Cincinnati City Manager Milton Dohoney told the Cincinnati Enquirer this week. "We continued to be pleased by the development at The Banks and we're getting a lot of positive feedback. We think this will only add to that."

For more information about leasing and other opportunities at The Banks, contact Laura Swadel of Carter at lswadel@carterusa.com.

 

Carter Interiors Team Volunteers to Support U.S. Troops

By Sarah Peddar, Business Development Manager, Carter

ATLANTA (Jan. 9, 2011) - Last week, the Carter Interior Project Management Team rolled up their sleeves and volunteered to support the USO on one of the nonprofit’s busiest days. 

Nearly 7,000 troops traveled through the Atlanta airport on Jan. 4 as they returned from holiday leave with their families. Buses picked up troops at the airport and headed to Georgia’s Fort Benning and Fort Gordon for training.

Furman Wood, long-time USO supporter and Managing Partner at Commercial Property Professionals, organized a 24-hour event where volunteers welcomed service men and women to Atlanta and helped support the USO’s mission. Jennie Rusciano, Allison Cummins and I staffed the event from 8 p.m. to midnight by checking-in troops and handing out meals.

Earlier in the day the entire Interiors Team met at Nan Loudon’s house to prepare 200 of these meals that included a turkey or ham sandwich, chips, a cookie and of course some Carter mints! The team even used their design background to decorate the bags.

That evening Nan Loudon and Amy Hunt both flew out of the Atlanta airport to attend meetings for a project Carter is working on with Starwood Vacation Ownership in Orlando, Fla.

“There were troops everywhere and I was so proud of our group for getting involved in the cause,” said Loudon. “Not only did we do a small piece to thank our troops for their service, we also had an opportunity to draw closer as a team.”

From left: Carey Poole, Nan Loudon, Diana Bradley, Shannon Kitzrow, Jennie Rusciano, Amy Hunt, Allison Cummins, Donna West, Sarah Peddar

More about the Interior Project Management Team

The Carter Interior Project Management team actively manages every aspect of our clients’ interior projects, including build-outs and renovations. Delivering over one million square feet of space each year, our team has a broad range of experience in a variety of product types and client situations. Our services include: strategic planning, work letter negotiations, budget and schedule development, design and construction management, bid and procurement services, furniture and equipment management, and relocation services. With several LEED- and Green Globe-certified interior projects, we are experts in creating sustainable interior environments. The team recently completed projects for: 22squared, King & Spalding, Starwood Vacation Ownership and Windham Brannon.

 

Carter Investments Turns Around Distressed Condominium Community

By David Nelson, director, Investments and Advisory

ATLANTA (Jan. 4, 2012) - In August 2010, Carter Investments purchased 115 vacant units and an undeveloped pad site in Valencia, a condominium community in South Jacksonville Beach. The property was initially planned to include 245 units in an upscale, gated condominium community, but after completing construction on three of the five buildings and closing only 89 homes, the financial markets changed and the property went into distress. Carter purchased the remaining note from the lender, and entered into a friendly foreclosure agreement with the prior developer. 

After a thorough review of the property, Carter Investments hired a new management company for the homeowners’ association oversight as well as Carter Program Development Services group to help manage the large projects. Since being taken over by Carter, the property has gone through a true transformation. There is now a focused effort on property maintenance and landscaping, a completed exterior painting project that added a waterproofing barrier to all buildings and a management staff that responds to homeowner needs. Financially and operationally, the property is now stabilized with the HOA budget and reserves being fully funded. 

Carter Investments left no stone unturned during its review of the property and assessment of what it would take to bring Valencia back to market. In doing so, Carter invested significant capital in the addition of a park on the Building 5 pad site. What was once a construction site, is now being enjoyed by families and friends as they walk on a 1/8 mile walking trail, take their dog to the dog park, explore their green thumbs in the organic garden or compete with one another on the bocce ball courts.

Carter Investments also hired a new marketing and sales firm to execute its strategy of stabilizing Valencia and then releasing it for sales at today’s market pricing. Through a comprehensive marketing campaign that resulted in new pricing, an updated brand, new collateral and new model homes, Valencia was reintroduced to the buying community as an incredible value for someone looking for a place that feels like home but offers the luxurious simplicities of condominium living.

For the first time in a long time, Valencia has become a place that is attractive to someone looking for a home in the Jacksonville/Ponte Vedra Beach area. A buyer can now confidently submit an offer and know that they are buying into a stable community. Carter was even able to achieve FHA as well as FNMA approvals for the property, which has further signaled the strength and stability of the community as well as opened the buyer pool to people who require lower down payments. 

Carter’s effort has been met with an extremely positive response from buying community. Prospects and sales agents have been impressed with the turnaround the property has taken, and Carter has successfully written more than 30 contracts in just the first year. With a healthy pipeline of prospects, the sales team feels very positive about 2012 and with enough sales, Carter Investments may even begin the interior construction completion of Building 4.

Carter is currently focused on value-add multi-family investment opportunities like Valencia. Carter closed four multi-family investments in the last year including two distressed condominiums and two apartments. Carter has a strong history and the capabilities to create and execute a strategy that will turn a property around. If you are looking for someone to invest in a value-add multi-family property, call John Akin or David Nelson at (404) 888-3000.