In 3Q2020, Greensboro had the strongest quarter for apartment rental demand in the past 10 years.
The coronavirus pandemic caused 58,000 jobs to be lost across the Greensboro metro in early 2020, equating to about 15% of its workforce. The metro is still more than 19,000 jobs short of its pre-pandemic peak, according to the Bureau of Labor Statistics' December report. However, many of the metro's key indicators have outperformed North Carolina's larger markets. Apartment demand held up relatively well, and in fact, in 3Q2020, Greensboro had the strongest quarter for demand in the past 10 years. While demand has certainly cooled since then, it could start to pick up soon with the onset of spring. Additionally, apartment completions are expected to slow this year, hedging against supply-side pressures on vacancies.
Vacancies are significantly below the historical average and rents continue to show strong growth on a year-over-year basis.
Vacancies have inched up slightly since the summer of 2020 but are still below the 10-year average. Current vacancy for the market is at 5.1%, significantly below the 8.7% historical average. Although leasing activity has slowed in recent months, continued economic improvement should support demand for rental housing in the long term.
Despite the economic disruption caused by the pandemic, Greensboro's landlords have been raising rents at a solid pace. According to CoStar's daily rent series, asking rents have been on an upward trend. Rents are now well above their pre-pandemic peak from early 2020. Though the pace of growth has slowed in recent months, rents are still showing strong growth on a year-over-year basis. In fact, asking rents are up by about 7.0% year over year, a record for the decade.
Greensboro is part of the Piedmont Triad, a region in North Carolina encompassing the Greensboro, High Point and Winston-Salem markets. Historically, the metro's local economy was centered around textile, tobacco, and furniture manufacturing, but the area has become the center of a wide variety of manufacturers in recent decades. Manufacturers that call Greensboro home include Volvo Trucks of North America, Mack Trucks, Qorvo, Wrangler, and Honda Aircraft Company. In addition to a large manufacturing presence, the metro is an important regional logistics hub for FedEx and UPS. In October 2020, UPS announced an expansion to its facility in Greensboro, bringing an additional 140 jobs to the city. While trade/transportation and manufacturing make up a large portion of Greensboro's workforce, the metro has a growing research and technology sector. Gateway Research Park, a joint venture between UNC Greensboro and North Carolina A&T University, is a multi-campus park centered on technology, life science, and medical research. Located in Guilford County, the park has helped attract investment and research activity to the Triad Region. Last spring, Canada-based ESC Brands opened a research and development lab in the park's South campus. The company produces a range of products including sanitizers, disinfectants and wound ointments.
Let’s connect to see how Bluefox Ventures can help you diversify your portfolio by investing in alternative assets like multifamily real estate.