Tuesday, January 24, 2017

Hickory - Morganton - Lenoir, North Carolina



The Hickory-Morganton-Lenoir MSA has a combined population of over 365,000 people.  All three cities are 30 minutes from each other.  I believe the area has a lot of potential due to its location along interstate I-40  and access to major cities.


Below are summaries for each of the three cities.


Hickory
Quick facts

  • Hickory is most famous for its past and present furniture manufacturers and fiber optic cable manufacturers; it is home to Apple's data center and solar farm as well.  
  • Hickory is the largest city of the Hickory-Morganton-Lenoir MSA and is also considered part of the Charlotte metro area. 
  • It's a nicely sized city of just over 40,000 people, but the population has grown very little over the last 6 years. 
  • Median Hickory household income is $40,000, slightly lower compared to the state's $47,000.
  • Lenoir-Rhyne University, a private Lutheran college, has over 2,000 students enrolled.
Thoughts

What I like about Hickory is that it's convenient to three major cities.  On average, it takes 1 hour to downtown Charlotte, 1.15 hours to downtown Asheville and 1.10 hours to downtown Winston-Salem by car.

The downtown area is fairly active and has a lot of potential to be vibrant, but as I drive around, I notice a lot of vacant retail/office and industrial spaces for lease and sale.

From downtown and the Lenoir-Rhyne University area, driving north on 127 (also known as Center Street) toward Lake Hickory, you'll start to see well-maintained historical neighborhoods, newer subdivisions and commercial developments.  Also, heading east on 70 from Interstate 40 is a strip of all major box stores.  To invest in either of these locations, you'll need to have substantial capital.

If you're looking for property for $400k and under, look downtown, as well as the Newton, Conover and Longview areas.  


Morganton
Quick facts
  • In the past, Morganton had many furniture manufacturers that have since moved.  Today, Morganton's major employers are in health and education, including North Carolina School of the Deaf, Broughton Hospital, and Burke County public schools.
  • Like Hickory, Morganton's population has been stagnant over the last 6 years, hovering just above 16,000 people.
  • The median salary is just over $35,000.
Thoughts

Again, like Hickory, Morganton is convenient to three major cities: 1 hour to Asheville and 1.20 hours to Charlotte and Winston-Salem by car.

I fell in love with Morganton after purchasing a duplex in the downtown area.  The vibrant downtown square doesn't have much retail space available.  (Just outside downtown, there is a strip of retail buildings along the well-traveled East Union Street where an investor can find a great deal, but that street is somewhat in need of revitalization).  Downtown has a large movie theater, great restaurants, coffee shops and a high-end grocery store, all which make the town attractive to a 30-something like myself.  It could be my imagination, but I see a lot of millennials around, making me wonder if it is, in fact, a perfect spot for young families escaping the high prices of Charlotte and Asheville. Since I have property there, I can tell you that a typical 2 bedroom, 1000 sq ft property will rent for around $600  - $700 a month.

Besides downtown, other retail areas of Morganton include a shopping center along Burkemont Avenue, where Walmart, Dick's Sporting Goods and other major retailers are stationed.

You'll find small box retail stores and fast food along Carbon City Road.

I can't say there are any particular areas of Morganton to stay away from.  It's not nearly as big as Hickory.  Any available property is to be considered.


Lenoir
Quick facts
  • Like Hickory-Morganton, Lenoir was a furniture hub, but most manufacturers have since closed up shop.  In 2007, Google built a $1.2 billion data center here that created around 110 jobs.  Education is the main employer.
  • Population hasn't changed for many years; it still falls around 18,000. 
  • Median income is around $30,000.
Thoughts

I believe Lenoir lacks the warm, "neighborhood-y" feeling that the other two cities have. Lenoir has more of an old factory town feeling.  There are certainly some great deals there!  Probably the best deals I've seen.  You can find a 8000 sq ft building for $200,000, and anywhere else it would be 3 times as much.  However, I would be scared of the exit strategy.  Hickory and Morganton sit on Highway 40, a major thoroughfare.  Lenoir is on Highway 321, which means that unless you are heading to Lenoir or Boone, you wouldn't pass through it.

For the reasons above, I don't actively look for deals in Lenoir.  I think the area from Hickory to Morganton holds more promise.


Summary

Hickory has quite a bit of wealth and new developments.  It has a lifestyle that the other towns don't have and is located closest to Charlotte.

Morganton is a clean town that is appreciated by all those in the area.  Everyone seems to love Morganton.

Both towns are opportunities for big and small investors.  I believe the rents will remain stable and will grow as employment grows.

If the numbers work, go after multifamily.  One would need to be quite strategic about retail and office investing and development in these towns. Hickory and Morganton look to be stable, but because of the very slow growth, give extra thought to your exit strategy.  I think these towns are best for a buy and hold strategy of 5-7 years.





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