Finding the Best Areas to Rent Apartments in Charlotte

It’s so difficult, when you’re moving, to think about living somewhere else. Many times people put off looking for a new apartment until they absolutely have to start searching or risk living in a hotel room for weeks. But the best way to find the apartment that you can love for a very long time is to actually start searching weeks, or even months, before you actually need to have an apartment. When you’re talking about moving to Charlotte, it’s important that you find a place that you really love to live in, which can be tricky if you don’t know much about the areas of the city. How are you going to know, for instance, whether you’ll enjoy living in an area like South Park or Parkdale unless you do some research on them?

Before you even think about beginning your search for a Charlotte apartment, it’s important that you learn as much as you can about the different neighborhoods of the city. Charlotte, like most big cities, has a number of neighborhoods. The city itself actually has 199 different neighborhoods! If you don’t live in the city currently, and you’re looking for Charlotte apartments for rent so that you can move there, the idea of having to search through 199 different neighborhoods for your perfect apartment can definitely be intimidating!

The internet is a great place to start if you’re trying to find areas of Charlotte that you will be happy living in. It is there that you can learn about areas like Parkdale. When you’re looking at Charlotte apartments for rent and you stumble across Parkdale in the listings, take the time to research it. You’ll find that Parkdale was created to be the home of split-level and ranch style houses. So if you’re looking for a quieter area, one that is a planned community, you may find that Parkdale is just up your alley. Because it’s only a fifteen minute walk to the mall and the park, Parkdale is a popular place for college students and young families to look for apartments.

An area like Sherwood Forest may be where you should look for a Charlotte apartment if you want to live somewhere a bit whimsical. The entire area is very similar to Parkdale, but all of the names of the streets are named after things that you can find in the Robin Hood stories. You’ll find streets like Nottingham Drive proudly listed in the directory. Can you imagine what it would be like to live in a Charlotte apartment that was situated on Nottingham Drive? Finding the best apartments in Charlotte, of course, has more to do with than just names. Look for nearby amenities, schools, restaurants, or easy access to primary roads – whatever your main concerns for an apartment location might be.

Once you’ve figured out which neighborhood you want to live in, you can then start looking at Charlotte apartment listings. Utilize a search engine so that you can narrow the rentals that show up to only ones that are in specific neighborhoods that you would like to find out a bit more about. This will help you save tons of time and a great deal of frustration as well.

Funding Real Estate Projects For the Hospitality Industry – Emerging Perspectives

rs and investors.

It has resulted in an extreme crunch for investment in the hospitality sector, coupled with the decrease in demand for rooms. This double whammy put to rest most of the ambitious plans of expansion across the country.

All players have been reviewing their plans of development, owing to the increasingly challenging macro economic situation at the moment. The total number of rooms estimated to be added is today nearly half of what was announced earlier. One-fourth of the plans announced so far have failed to materialize, while the rest are hanging on the edge of viability.

DLF, Parsvnath and other developers of similar cadre have scaled down or slowed down their plans of expansion. Parsvnath which had plans of adding at least 10,000 rooms has now stopped acquiring land for any further plans other than the twenty hotels for which they have already done the same.

There have been reports that DLF has been in talks with various Hotel companies to sell eight to nine of their land parcels demarcated for Hotel projects to raise funds. Unitech has sold its Gurgaon Hotel project to reduce its huge debt burden.

Developers are more focused on finishing the projects on hand than on making plans for the future. Divesting the investment heavy Hotel plans seems to be the best way out for the cash strapped, heavily indebted players to survive the present-day economic scenario.

Financial Projections Going Awry

The seeds were sown, the crops were nurtured through the tough inflationary times but when the time to harvest came, the floods of recession washed away the anticipated bounty. Cost and revenue assumptions made during the good times have thus gone for a toss.

When it comes to loan disbursements, real estate is presently the black sheep of the family. Private Banks from which loans were freely available earlier have dried up. Public sector banks which continue to lend, albeit cautiously, now require a higher collateral to lend the same amount.

Non-banking finance companies are either not lending at all or looking at returns in the post 20% range. Private Equity interest in the Hospitality sector has all but dried up. Due to the severe global liquidity crunch and flight of capital to ‘places of origin’, there is a diminishing interest for Private Equity players in foreign markets. This has added to the financial woes of the capital-thirsty developers.

The risk associated with a Hospitality project being relatively larger, the premium at which funding is available has gone up. Due to this, only the most stable projects in the market would be able to take up the risk of delivering higher returns to the lenders.

Many developers had invested heavily in land in the past when the land values were significantly higher. At present, the value of the same land parcels has come down significantly. The excessive reliance on the appreciation of these assets has turned out to be a serious dampener to the development plans of various developers. The lower value of land means that the value of collateral has come down for project loans.

The cycle of cost of construction has taken the industry on a roller coaster ride over the past couple of years. The global commodity cycle has drastically changed its course. Steel and cement which form a significant chunk of the civil construction costs have lost up to 40% from their historic highs twelve months ago.

The hotels which have opened recently have faced the brunt of the cost fluctuations in a similar fashion. Greater costs were incurred, owing to the period in which their construction phases passed through. The cost of materials was higher, the market was booming and along with the high material costs, the various architects and consultants demanded a premium as a result of a never-before-seen demand. Despite the increased amount of investment that the developers had to put in, they now face a world with reduced revenue prospects.

The main factor that has directly and indirectly influenced the stability of revenue-side financial projections in the Hotel industry is the lack of ‘stickiness’ relative to other real estate sectors. For the record, the stickiness of the Hotel Industry is relatively low. In order to explain, take lease agreements into consideration. These are long term in nature and hence revenues are more secure in the case of an Office or Retail space as they have a considerable lock-in period.

However in case of the Hospitality industry, the revenues are more directly susceptible to market conditions. This being the reason as to why other sectors have been relatively less affected by the present day scenario. The main factors influencing this stickiness are occupancy rate and Average Room Rate (ARR).

Occupancy Rate is a function of supply and demand. The present scenario is affected by both the demand and supply factors, with demand having the more potent influence. The two main demand drivers, the leisure and business travelers, have contributed to the reduction occupancy rate. Overseas travel has been affected to a large extent due to the economic slowdown.

Corporates have found innovative ways to cut down on their expenses and there is a growing need for them to rationalize business travel. They have reduced their travel budgets, are staying at serviced apartments and guesthouses or even looking at options where they can avoid staying overnight.

MNCs with significant exposure to the developed markets are taking the lead to drive travel associated business expenditures down as a part of their global strategy. Spending sentiments of consumers has been hit to a large extent owing majorly to fears of job loss and a resulting lack of confidence and low morale. The leisure consumers are hence looking to spend lesser on travel.

In addition to the demand slowing down, the supply is on the increase which would mean that the occupancy rates are set to reduce further at least for the next one or two years. All these factors contribute to a significant reduction of occupancy rates, and this is a primary reason contributing to the instability of the financial projections made by various players.

On the supply side, although there is an inherent demand for more supply in the long run, occupancy rates would see an improvement only with the revival of the economy.

Due to the hit on occupancy rate, Hoteliers have been forced to cut down on the ARRs to attract both their business and leisure customers. The occupancy rate has also negatively affected the other closely linked revenue sources such as Food and Beverage, Conferences and Banquets.

Role of Funding Options

Traditionally, most developers have tended to plough back the surplus that they earn, into their business via investing in land banks. This makes them highly dependant on external sources for funding. The various equity funding options available in the market till now have been Public or Private Equity which can be Foreign (FDI) or Domestic Funding.

In the present market scenario, there is a lot more uncertainty in cash flows associated with Hotel projects than usual. This has led investors to be quite cautious when it comes to investing in or lending to hospitality projects.

Private equity, while still being an option, has seen a slowdown. Investors are worried about the market bottoming out and there is a feeling that the correction in the Hospitality sector is still not complete. PE players are avoiding common equity in SPVs but looking at structured investments with greater security and preferred returns. However, there are a number of funds which are actively looking to buy out or invest in distressed assets at enticing valuations.

Having said that, owing to the severe capital crunch, the market for new PE capital raising especially in Real Estate is difficult right now and is likely to remain so for the next two to three years. Where funds have already been raised, there have been cases of Limited Partners (LPs) not honouring their capital commitments.

Project Loans for under construction projects are harder to come by with only the public sector banks lending. These loans are being disbursed primarily to promising projects with substantial asset cover guarantees. We have also witnessed cases of liquidity-hungry developers borrowing from HNIs at extremely high rates.

Bailing Out Stranded Projects

A million dollar question on everyone’s mind would be on how to bail oneself out of stranded projects.

Divesting a part of the stake in the project to gain capital may be one of the options. This may not be very easy in today’s market. The project maybe valued at a much lower price than what is expected and may leave the seller with a raw deal from the transaction made.

One could also think of repositioning the project. Instead of increasing the investment requirement for a project by planning a high end luxury hotel, one could look at serviced apartments and budget hotels at the moment to get through the times of credit crunch.

Another option would be to reduce the scale of the project. One could reduce the size of the project in one go or could phase out the development. Phasing the project out in stages where part of the hotel could be operational in relatively less time and with less investment than earlier planned would help ease the credit and liquidity crunch. There are quite a few operators who take a stake in the project as well. Accor is a good example of such an operator who have significant expansion plans in India.

Tying up with suitable investing operators would, however, not be as easy as it may seem, since these operators would choose only the best of the options available and they would have their own plans in place already.

Going back to the lender may be an option worth visiting, to see if they could restructure the existing loan. One could also go for refinancing or extending the loan. If the borrower has a good record, they could also look at finding a new lender as well, probably an HNI who would be willing to invest.

However, if the only option left is to exit the project, the timing would need to be well thought out. If one waits too long for a good price, the price might just go lower. On the other hand one also needs to assess the urgency to exit the project as we would not want to end up in a situation where we would be forced to accept a price which would normally be unattractive.

Liberalization of FDI Norms And Its Impact On Expansion Plans

FDI has the promise to be a major factor in the economic development of the many developing nations of the world. With tourism being a major revenue earner for countries across the world, FDI norms liberalization in this sector is a definite boost for the Indian economy.

The government has been very liberal when it comes to FDI regulations in the Hotel and Tourism industry. According to the Government of India – Ministry of Commerce and Industry Press Note 2 (2000 series), 100% FDI is permissible in the Hotel and Tourism sector on the automatic route subject to the automatic approval clauses.

The additional restrictions, applicable to some sectors of real estate, such as area of development being at least 50,000 sqm, 50% of the project to be completed before 5 years, no repatriation of funds before 3 years from date of minimum capitalization released in 2005, are not applicable to the Hotel and Tourism industry.

The government has thus made a conscious effort knowing the fact that tourism can be a major source of revenue for the country which is still relatively untapped. Hence, the only effect that existing FDI norms can have on the industry is on the positive side. It is only a matter of time before investments in the Hotel and Tourism sector start flowing in freely once again.

These investments would be more dependant on the inherent demand in the industry and the overall economic scenario across the world. Once the credit crunch situation gets better, the inherent demand in the industry that one senses should help attract funds easily as compared to some of the other sectors.

Some say the worst is over and India will be getting back on its feet soon. However, the key is not just to wait and watch but to try and be one step ahead. Be ahead and decide on when to stop waiting. Only the best would survive and we would be lying if we said we weren’t all eager to see who they really are.