2 min read March 2021 — Raleigh-Durham is primed for strong growth for the foreseeable future, according to George York, president and CEO of York Properties. In an interview with Invest:, York shares his perspective on the pandemic, how businesses discovered new ways to operate and how that led to some of the best months in the history of the company’s brokerage division.
What are some of your key takeaways from 2020?
It was surprising to us how well we did once we got our legs under us as the pandemic unfolded. We were coming off a string of really good years and then everything shut down abruptly in March. A significant portion of our business is retail-related, which was a big unknown due to virus concerns, and we feared the worst in terms of how our operations would fare. For April-May, that forecast was pretty true. We rely heavily on successful merchants at our retail properties and one of our primary roles is to help them be successful, which was hard to do in a pandemic. Fees for property management are generally based on rent we collect and we had some properties where less than 30% of the rent that was scheduled to come in was being paid. It was a sizable issue for us and our clients who still had mortgage payments to make.
Around summertime, the situation started to improve. Retail operators were forced to figure out a new way to do business, whether it be a restaurant that never did takeout well that began to rely on a new online ordering platform or a retailer that previously didn’t have an online sales platform that had to start e-commerce sales to move inventory. Across most of our properties, we have seen merchants that were not really focused on doing any business online that have figured out how to do it. Consequently they were able to generate more revenue, even with limited foot traffic in their businesses. We were able to inch our way along and get through it.
As a real estate services company, we started achieving much better results toward the end of the year than we had forecasted when the shutdown happened. It was a true highlight to see the resilience of the folks we have on our team at York. 2020 was a slow year for our brokerage division until November and December. We had the second- and third-best months in the history of our brokerage division at the end of 2020. It was like the floodgates opened. There were a lot of transactions that crossed the finish line at the end of the year.
What are the most important ongoing infrastructure projects in the region?
The mass transit opportunity is top of mind for me. We have the bus rapid transit system coming online soon, which does not sound all that appealing to me but it’s a good interim step for moving people around the community. The light rail/commuter option is still years away but it will be a significant opportunity to assist our ability to grow in this region. At some point, having that type of transportation option to get us around the Triangle will be critical. It needs to go where people want to go but it can’t stop at everybody’s house, so the details still need to be drawn out to help maximize usage and efficiency.
Which areas of Raleigh-Durham are growing faster than others?
Ten to 15 years ago, Downtown Raleigh was not a very exciting area. It has been wonderful to see the resurgence of Downtown Raleigh with the 24-hour city vibe, the live, work, play environment, the great restaurants and entertainment options. The same can be said for the Downtown Durham area. It has really been transformed over the same period of time as Downtown Raleigh. Downtown Durham has the benefit of being adjacent to Research Triangle Park too. The boundaries of Downtown Durham and the Research Triangle Park are actually really close, so they have an opportunity to serve as the town center for much of RTP. Then there is the whole North Hills area. It’s fantastic what has been done with that neighborhood. It has cemented its very own, wonderful live, work, play environment, including lots of great office product and new apartments to complement the retail shopping. Residential communities around North Hills have benefited from all the wonderful things that have been done there. It has been great to see it transition from a sleepy, old mall to what it is today.
What is your outlook for your properties?
We believe 2021 will continue to be a tough year for our properties as we continue to navigate the COVID environment, and it’s apparent that the return to normal won’t happen until later in 2021 at the earliest. We will continue to work with our property owners and our merchants to create an environment where they can both be as successful as possible. A partnership approach between the property owners and their tenants will be essential in 2021 as we fight through this difficult period together. Going forward, our market and our properties are well positioned to take advantage of regional growth that we believe will continue to be strong for the foreseeable future.
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