By: Jordan McCarley, Capital Markets – Multifamily
Charlotte officially raised the stakes regarding its commitment to providing residents with quality lifestyle options by opening LYNX’ $1.1 billion Blue Line Extension (BLE) on Friday, March 16th. The 9.3-mile light rail addition connects UNC Charlotte’s Main Campus to the 7th Street station in Center City. The BLE is a product of a 10-year planning and construction process that resulted in 11 new stations, four park-and-ride areas, more than 3,000 parking spaces, and connecting bus services.
The estimated ride time from Uptown to UNC Charlotte is 22 minutes and the line is projected to serve 25,000 daily riders per the Charlotte Area Transit System (CATS). Operating for less than one week, the BLE has already served students, working commuters, attendees of the NCAA Tournament, and other visitors of the Queen City.
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The LYNX Blue Line micromarkets, defined here as 0.5-mile radius around each station, are home to nearly 17,000 market-rate multifamily rental units, 15% of which were delivered over the past year. The BLE micromarkets include nearly 5,800 market-rate multifamily units, nearly 20% of which have been delivered since first quarter 2017. Another 850 or more units are projected to be delivered by January 2019 along the new stations.
The rate of new multifamily development in these areas is more than double the rate the areas have seen in the past five years, indicating a notable acceleration in multifamily construction oriented towards walkable access to public transport. During the past five years, the average effective rent in the LYNX Blue Line submarkets increased by 22% overall while the areas along the BLE stations only increased by 12% per CoStar. Now that the BLE is operational, it remains to be seen whether rent growth will accelerate along the extension; however, the BLE certainly presents more runway for growth in a real estate cycle that is already mature.
Charlotte’s light rail expansion does not end with the BLE. LYNX is currently constructing 11 new stations along its Gold Line, adding 2.5 miles of light rail that is projected to be complete in 2020. Once operational, Phase 2 of the Gold Line will connect Johnson C. Smith University to the Charlotte Transportation Center (CTC) and Novant Health Presbyterian Medical Center to Sunnyside Avenue. The city anticipates this expansion will result in more than 1 million square feet of new residential units, retail space, office space, and hotels combined.
Kristina Garcia is a researcher on the Southeast Multifamily Research team at Cushman & Wakefield.
Jordan McCarley joined the Cushman & Wakefield Multifamily Advisory Group as the Executive Managing Director of the Charlotte office when C&W acquired Multi Housing Advisors (MHA) in 2016. Jordan helped to establish the firm’s presence in the Carolinas, and his Charlotte-based team has closed more than 200 transactions totaling over 38,000 units and $2 billion.