2024 did not turn out the way that we expected.
We began predicting the recession in the summer of 2023, when the FED was hoping for a “no hard landing,” or at least a “soft-landing,” scenario in 2024. Hindsight is perfect, and we can now confirm that predictions made last year were less than perfect.
2024 was supposed to be the year that we finally returned to “normal.” But unfortunately, the fiscal and monetary responses to COVID (the supply shock) only seemed to create unexpected and unintended consequences. The resulting uncertainty is now evident in the stock markets, weakening labor markets, rate cuts, low oil prices, and a strong dollar.
Despite all the uncertainty, we still had a great 2024 due to our convictions that:
Cap rates were falling–so we sold and returned almost $16 million to our investors.
Construction pricing (and interest rates) maintained levels disproportionate to rental rates, so we paused new construction projects to avoid locking in for the long run.
Massive infusions of institutional capital were coming into our primary focus markets (Charlotte and RDU), so we pivoted to adjacent tertiary markets.
Investments to expand and re-tool company infrastructure were needed maximize our ability to locate and evaluate “off-market greenfield” mixed use opportunities in these tertiary markets.
And here’s what we do know going into next year:
North Carolina remains a shining star among state economies. The communities around Charlotte, Raleigh, Wilmington (and now even the Triad) will continue to grow in 2025. We have now incorporated a new operations manager, a development director, analysts, and brokers to identify, evaluate, and develop opportunities much more efficiently than ever.
In summary, we are absolutely bullish on 2025. We see today’s uncertainty asunprecedented opportunity. And even though we paid off debt and harvested a great deal capital 2024, we plan to deploy several new funds in 2025 to execute on these new opportunities.
-Sam Simpson
