In Miles Hamrick Sr.’s world, you have to be realistic.
For more than 30 years, Hamrick and his real estate appraisal operation have seen both scorching real estate markets and carnage and collapse like the Great Recession.
âYou can only report what you see and you have to see the big picture,â Hamrick said. “And what we’re seeing right now is huge uncertainty.”
This is why Hamrick said he was not surprised to see the recent foreclosure of the Belmont Village shopping center.
Developed in 1994, the mall, located near the corner of North Main Street and Wilkinson Boulevard in Belmont, the last property sold for $ 5.3 million in 2002. It was seized and transferred by trust deed on 3 August for $ 4.2 million, according to county records.
Martin Eudy of Gaston Real Data said the lockdown represents the largest Gaston County Gaston County has known “for a very long time.”
According to Hamrick, job losses and restrictions linked to COVID-19 – in particular limiting some establishments to 50% of their capacity – have hit the retail, hotel and restaurant industries hard.
âIf you’re a retail focused mall, especially restaurants, you’re going to have a hard time,â Hamrick said. âThe restaurant margins are already slim, and then you add a capacity restriction to that and things get really tough. If these places cannot pay their rent, it will have an impact on the landlord. It becomes difficult to get out of this. “
National retailers suffered in 2020, leading to bankruptcy filings by brands like JC Penny, Pier 1 Imports and Men’s Wearhouse. Coresight Research reported earlier this summer that up to 25,000 stores nationwide could close this year.
Locally, restaurants like Cici’s Pizza and Market Street Buffet & Bakery, among others, have said they will not reopen even after the pandemic is over.
“When companies start dropping Chapter 11 en masse, the mom and pop stores that make up Main Street will have to work to hang on,” Hamrick said. âThey just don’t have the resources to hang on. It hurts the whole real estate market. If you’re a real estate owner with the right mix of businesses, you can survive, but there are a lot of unknown, particularly when (North Carolina Gov. Roy Cooper) may or may not continue to extend these restrictions. “
Eudy agreed he would expect to see further uproar in the commercial real estate industry, but has said in the past that problems were preceded by problems in the residential real estate market. This is not necessarily the case today.
âDo I see a leveling in residential property prices? Yes,â Eudy said, highlighting national data from the Federal Housing Administration which showed the first nationwide home price declines since 2011.
âIn the last couple of months alone we’ve seen things start to stabilize or go down in some cases, but people still need housing and not everyone is out of work,â Eudy said. . “You have a new Lennar subdivision near Mountain Island Lake that is selling like hot cakes.”
Coldwell Banker Commercial MECA Broker Bob Clay agreed that tenants in smaller malls are struggling, but said land sales and commercial industrial spaces have continued to move.
âIs retailing questionable? Yes, âClay said. âThere’s no way a restaurant with three, five, or seven employees could afford to pay rent like it’s running at 100% capacity. On the investment side, though, I think we’ve seen developers and lenders hit the brakes, but they’re back. on gas now. I think we are living the silver lining. “
Scott Hobbs, broker and director of Century 21 Capstone Commercial Group, said his office was concerned at the start of the pandemic about the pain it could bring to the market.
âWe had no idea what this was going to bring,â Hobbs said. “But right now, today, we are witnessing a constant movement in the realm of office space and income producing spaces.”
Notably, Hobbs said his office’s land listings were up 25% from the same time last year and that deals that were slated before the COVID crisis continue to close.
âThese are small and medium-sized businesses that are actively researching despite the pandemic,â Hobbs said. “If they had run out of space before this all started, for many of them that is still true today and they continue to push forward with their expansion plans.”
Hobbs agrees with Hamrick’s assessment that COVID-19 will continue to bring uncertainty to real estate markets.
âBefore, it wasn’t that hard to make long-term predictions about where and how things were going to turn out,â Hobbs said. âThat is certainly not true today. I think the most resounding thing that we have seen though, is that people want to keep moving forward. Just like the recession, it has ended. . It will end and people are planning it. “
Contact Adam Orr at 704-869-1828 or [email protected]