Market of the Month - Greensboro/Winston-Salem
By Heidi Nielsen, Vice President of Business Development
HVMG has operated in the Greensboro and Winston-Salem markets for a while and has experienced growth in both of these cities. Both are part of the Piedmont Triad, which has historically been known for furniture, textiles, and tobacco but has been diversifying into distribution, logistics, biotechnology, aviation and aerospace. Also included in the Piedmont Triad is High Point; the triad area is known as the "Home Furnishings Capital of the World," with the area boasting a large concentration of furniture manufacturing firms and the High Point Market, the world's largest wholesale home furnishings show.
Greensboro is the third-largest city in North Carolina and is home to over 200 international firms. In December 2021, Toyota Motor North America announced that the Greensboro-Randolph Megasite was chosen as the location for Toyota's automotive battery manufacturing plant. The plant is anticipated to be operational in April 2025, and Toyota is expected to invest $13.9
billion.
In addition, in the last six months, a number of other
companies announced expansion in the area:
·
Amazon purchased 85 acres for future development.
·
IQE, Inc., a global semiconductor manufacturer, announced
plans to add 109 jobs and invest $305 million over several years.
·
Gilero, a medical device manufacturer, plans to
invest $6.4 million in a new manufacturing plant, which will begin production
in the second quarter of 2025
Similar to Greensboro, Winston-Salem is also seeing a
significant amount of growth, with companies like Foster Caviness, Radél,
Purple Crow, Tex-Tech Industries, and Toyota Tsusho America expanding. Furthermore,
Winston-Salem is home to two major healthcare systems, Atrium Health Wake
Forest Baptist and Novant Health. Atrium Health is currently focusing on
expanding the emergency department, which is anticipated to open mid-2025, and
building a new critical care tower, which is expected to be completed in 2026. Meanwhile,
Novant Health Forsyth Medical Center completed its new five-story tower in
January 2025, which was part of a $400 million multiphase project.
Year-to-Date Trends: As of January, the
year-over-year twelve-month occupancy has grown by 2.9%, ADR has changed by
1.3%, and RevPAR has increased by 4.3%. CoStar anticipates this improving trend
to continue at a moderate rate, which is supported by all of the development in
the market.
Source: CoStar
New Supply: According to CoStar, six properties (comprising
550 keys) are under construction in the market, accounting for 2.5% of its
existing inventory. Over the past twelve months, approximately 270 keys have
opened, while in the past three years, the room count has increased by 780
keys, or 2.7% of inventory. In comparison, the national hotel industry has grown
by 1.2% of inventory over the last three years.
Transactions: Given the challenging capital market
environment and conditions in the debt markets, sales continue to lag historical
data. In the last 12 months, 11 hotels have transacted in the area with a
transaction volume of $57.4 million. Approximately half of the sales were in
the upscale and upper-midscale segments, while the other half involved midscale
and economy assets.
We have an optimistic view of the Piedmont Triad area, with so
many companies planning to expand there. The Benton Convention Center, operated
by HVMG, is a key venue for large-scale events, conventions, and exhibitions in
Winston-Salem. Additionally, the region is home to 13 colleges and
universities, as well as nine technical and community colleges, including Wake
Forest University, the University of North Carolina at Greensboro, and North
Carolina A&T State University. Furthermore, this area has seen record
tourism spending, with sports events being a primary driving factor. We expect
this to continue in the foreseeable future.
