Eller Capital Partners Addresses Rental Demand-Supply Challenge
- Nov 13, 2015
By Jeffrey Steele, Contributing Editor
Chapel Hill, N.C.—Lack of available land and high prices are among factors leading to a dearth of quality multifamily housing in many developing areas of the United States. Renters frequently can’t afford to live in the cities where they work or attend school, forcing them into long commutes from outlying, more affordable areas.
Chapel Hill, N.C.-based Eller Capital Partners president and CEO Daniel Eller is addressing the issue, and in the process working to improve renters’ lives by filling a gap in the housing market. Three of the company’s major renovation projects in Chapel Hill—86 North, Timber Hollow and 2015 MHN Excellence Award winner The Apartments at Midtown 501—are helping fill a void left by the lack of multifamily development over the last 10 to 20 years in Chapel Hill.
Upgrades to these three properties, all of them built 25 to 45 years ago, include plank flooring, new cabinets, granite countertops, stainless steel appliances, new interior doors, USB charging outlets and enhancements in on-site amenities. These improvements have allowed a greater percentage of Chapel Hill’s apartment supply to meet the needs of today’s renting population.
For years, Chapel Hill has suffered from a lack of new development, resulting in only 430 units built in the last decade. Fifty thousand people commute in to the city daily to go to work or college. Many would like to live within the city limits of Chapel Hill, but there isn’t enough housing to serve them, Eller said.
Quality of life declines as a result. “You have major traffic congestion,” he said. There is a bus system, but there is not yet light rail. And for that reason, all your traffic corridors in town get jammed during rush hour. It’s an unpleasant drive.”
Those parents who don’t live within the city borders can’t send their children to Chapel Hill’s schools, which are among the best in the state. Though they live near and work in Chapel Hill, their kids can’t benefit from the city’s schools.
“Even though you have a lot of product built in the 1970s and ‘80s, this product is old; it’s Class C,” Eller said.
“Wherever you have apartments outside Chapel Hill that are newer, people prefer to live there over living in the C and even D products inside Chapel Hill. That’s the opportunity we saw a few years ago. We saw some well-located Class C and D properties could be renovated to bring them up and compete with the newest properties.”
The company’s work at 86 North, Timber Hollow and The Apartments at Midtown 501, which earned a 2015 MHN Silver Excellence Award for Best Value-Add Renovation, is one possible solution, Eller said. “We’ve been able to do this three times,” he added. “It has to be the right location, has to make sense. There is opportunity in continuing to do this. But what would be most helpful to the town of Chapel Hill is continuing to approve new residential development.”