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 [email protected].

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 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.

 

Carter Pursuing $500 Million in Development, Investments

Firm’s Focus Centers on Multifamily, Student Housing Projects and Office Investments

ATLANTA (Dec. 8, 2011) - With the sale of its brokerage and property management groups complete, Carter is focusing on new investment and development opportunities as well as growing its program management and strategic consulting groups.

Moving forward, Carter will leverage its 54-year-old brand to create value through its strong relationships. Specifically, Carter is focusing its efforts on the:

• Development of mixed-use and for-rent multifamily projects in urban infill locations.
• Equity development of student housing.
• Acquisition of opportunistic and value-add investments in office.
• Growing its well-established project management and strategic consulting businesses.

The firm’s more than 100 high-caliber associates will serve clients using a high-performance team-based approach that results in delivering maximum value for our clients and investors. This approach allows Carter to leverage the firm’s strong expertise and deep knowledge base in a wide variety of markets and product types.

“The sale of our brokerage services and property management businesses marks a milestone for Carter,” Chairman and CEO Bob Peterson said. “This transaction was a major step for us in executing our strategy to narrow Carter’s focus on building high-quality projects, investing in real estate and providing strategic solutions to our clients.”

Carter’s development business expects new opportunities to emerge as corporate and educational development begins to rebound. Carter is the No. 3 commercial developer in the United States, as ranked by National Real Estate Investor, and currently is overseeing The Banks, one of the largest mixed-use projects in the Midwest. Carter is master developer of The Banks, a $600 million development on the Ohio River in Downtown Cincinnati, Ohio. Late last month, Carter announced plans to double the size of the retail and multifamily components along with new marketing efforts for the proposed office component.

In the K-12 education realm, Carter is currently overseeing a $107 million public school building program in Enid, Okla.

The firm’s Interiors group continues to be a leading third-party provider to top law and financial firms and grown its business well beyond Atlanta. The Interiors group currently has more than 500,000 square feet under construction for clients such as AT&T, RockTenn and Starwood Vacation Ownership.

Carter’s Higher Education and Campus Innovation team is currently leading a $100 million program at the University of Louisiana Lafayette that comprises 2,000 beds and 900 structured parking spaces.

“Our 54-year history of development across the Southeast and beyond positions Carter to take full advantage of new development opportunities,” said Carter President Scott Taylor. “Our Development group is well positioned when it comes to developing and building out corporate, institutional and educational buildings and facilities.”

Carter’s Investments group is actively seeking new opportunities across the country. Vice Chairman Jim Shelton, who leads Carter’s Investments group, said he expects to see more high-quality assets to come to the market at distressed prices. Carter recently invested in City Federal condominiums in Birmingham, Ala., and Valencia condominiums in Ponte Vedra, Fla., and played a key role on Piedmont Office Realty Trust’s acquisition of The Medici office building in Atlanta.

The firm also serves as a service provider to Carter Validus Mission Critical REIT, which is focused on acquiring mission critical facilities such as data centers and healthcare facilities. John Carter, a Carter vice chairman, serves as CEO of Carter Validus Mission Critical REIT.

In other areas, Carter’s strategic consulting group has performed advisory assignments for seven major clients in 2011 alone. Carter will continue to deliver high-quality service and results from its asset management division, which oversees more than $2.5 billion of third-party and Carter-owned properties.

“Moving forward, you will see Carter aggressively leveraging our thought leadership and experience to pursue and participate in high-quality developments and investments on behalf of our firm and our clients,” Carter’s Peterson said. “We will do this while continuing to build on our core values of integrity, commitment and excellence.”

About Carter

Founded in 1958, Carter is one of the country's leading real estate development, investment, and advisory firms. The firm has headquarters in Atlanta and operations across the country. Carter focuses on development of mixed-use and multifamily projects in urban infill locations, equity development of student housing, acquisition of opportunistic office, project management and strategic consulting. Carter’s high-caliber associates create value for clients using a team-based approach that leverages strong expertise and a deep knowledge base in a wide variety of markets. Carter is the country’s third-largest commercial developer, according to National Real Estate Investor, with strong higher education, k-12, interiors, and corporate specialty practices. Carter also focuses on value-add real estate investment opportunities, currently overseeing a $550 million portfolio. Carter’s asset management division manages more than $2.5 billion of third-party and Carter-owned assets. Its strategic consulting practice provides clients with customized real estate solutions. As it has for 54 years, Carter will continue to build on the firm’s core values of integrity, commitment and excellence and strive for a culture based on trust and candor. For additional information on Carter, please visit http://www.carterusa.com.

 

Carter Says City Federal is 93 Percent Sold

By John Akin, senior vice president, Carter

BIRMINGHAM, Ala.(Dec. 7, 2011) - The City Federal Building in Birmingham, Ala. is 93 percent sold with only six condominiums still available. Carter acquired the note for the 27-story, mixed-use building back in October 2010. At the time Carter took control of the building, 32 of the 84 condos were unsold. Carter also acquired 15,000 square feet of retail in the building that is currently being marketed by Harbert Realty.

In addition to condo sales, there have been some other exciting happenings at City Federal. Last month, six scrapbooks complete with photos, newspaper clippings, documents and memorabilia were found in a closet of the building.  The books covering decades of City Federal Savings & Loan history were moved around the building during renovations until Ingram & Associates’ Tom Loyd examined the scrapbooks. Along with several real estate agents from Ingram, I had the honor of presenting the scrapbooks to Jim Baggett, head of archives at the Birmingham Public Library. For the complete story, click here.

Added to the National Register of Historic Places in 1984, City Federal remains the tallest neo-classical skyscraper in the Southeastern United States. City Federal remained an office building until 1995, when it closed its doors. The building stayed vacant until March 2005 when the new owner began a $20 million renovation to convert the building into condominiums.

The renovated condominiums feature nine-foot ceilings, large windows, gourmet kitchens with granite counter tops and stainless steel appliances, ceramic tile in the bathrooms, hardwood floors in the living areas and kitchens, elevator lobbies with original tile floors and a restored original Grand Street-level residential lobby.

Carter's Investments group is actively seeking new opportunities, especially in multifamily and value-add office across the country. For more information, check out Carter’s Investment page.

 

Residents Move-in at The Banks

CINCINNATI, Ohio (August 02, 2011) - This summer some of Cincinnati’s newest residents are settling in and enjoying all the Queen City has to offer. According to them it's happening at The Banks, Cincinnati’s new mixed-use development located along the Ohio River.

Current At The Banks, the development’s first apartment complex, opened its doors this spring to residents. The complex has attracted people from all walks of life. However, one thing they all seem to share is the excitement of living in Cincinnati’s premier live-work-play destination.

One of the newest residents is Amanda Rose. A recent Ohio State Law graduate, Amanda and her roommate wanted to find an apartment with great amenities that was close to their jobs and the social scene.

“I really like the location,” said Amanda. “I’m right by the river and I can walk to both work and the Reds’ games.”

Recent grads aren’t the only people flocking to The Banks. Mike Glotfelter, 65, has followed the development since its inception and was delighted to move into Current At The Banks. Although downtown life is a drastic change from Mike and his wife’s former life on 28 acres, they are learning to adjust.

“My experience has been wonderful,” said Mike. “I’ve always wanted to live downtown, and I have met a lot of nice people.”

Current At The Banks has amenities that include granite countertops, walk-in closets, built-in microwaves, contemporary finishes and a washer/dryer in every apartment. Resident Lindsay Rain described the amenities as one of the top selling points in her decision to move.

“I cannot put into words how happy I am that I decided to live at The Banks,” Rain said. “The pool is one of my favorite amenities. Some of the best bars and restaurants in the city are within walking distance, not to mention those that are conveniently right downstairs!”

Located between the Great American Ball Park and Paul Brown Stadium, The Banks spans 18 acres and features residential, office, retail and restaurant options for all to enjoy. Carter and The Dawson Company were selected by the City of Cincinnati and Hamilton County to serve as Master Developers for The Banks. Carter also served as Program Manager for the construction of the City and County-funded parking garage and infrastructure components of the project.

Check back soon for more updates on what’s happening at The Banks!

 

Carter Invests in Class A Apartment Community in Jacksonville, Fla.

By Malloy Peterson, vice president of marketing, Carter

ATLANTA (Dec. 28, 2010) - Carter has joined with Wood Partners and Lubert-Adler to invest in Magnolia Village Apartments, a class A rental community in Jacksonville, Fla.

The apartment community, located at 1620 Bartram Road in Jacksonville's desirable Southside neighborhood, comprises 168 units in six buildings. The Wood Partners-led investment group acquired the complex "on a short-sale basis at a significant discount to replacement cost," Wood Partners said today in a press release announcing the acquisition.

Carter decided to invest in Magnolia Village Apartments because of the opportunity to acquire a high-quality asset at a price well below what it would cost to replace it. Moreover, investing in Magnolia Village offered Carter the change to fortify its presence in the Jacksonville market.

"Magnolia Village presented an opportunity to acquire a class A multifamily asset at a price below replacement cost, in a market Carter believes in, with strong operating and capital partners," said John Akin, a senior vice president in Investments & Advisory who oversees Carter's multifamily investments. "It is the perfect complement to our recent acquisition of Valencia in Ponte Vedra."

In September, Carter Real Estate Fund II acquired Valencia, a distressed condominium complex just outside Jacksonville. Carter is marketing the remaining available condos at Valencia and has land for the development of future units there.

Magnolia Village is a gated apartment community offering one-, two- and three-bedroom apartments as large as 1,513 square feet. The landscaped grounds include a clubhouse, resort-style swimming pool and poolside Wi-Fi access.

"Magnolia Village fits the direct center of our strategy to buy well-constructed, well-located assets in stabilized submarkets that exhibit stabilized cash flow with room for growth," said Jay Jacobson, director of national acquisitions for Wood Partners. "We found the near-in Southside area attractive due to its infill nature, which was further enhanced by the adjacent redevelopment of a Publix grocery store that anchors a new neighborhood shopping center - a convenient amenity for our residents."