The News & Observer (Raleigh, N.C.), David Bracken column [The News & Observer (Raleigh, N.C.)]

May 16--CARY -- With developers proposing new apartment projects in the Triangle on a seemingly weekly basis, the one thing we can be certain about is that not all these projects will get built and not all the ones that do get built will be a success.

The timing of when a project opens, in addition to its location and the quality of its units, will go a long way toward determining how well it does.

In the case of Northwood Ravin, which is now opening new communities in Cary and downtown Raleigh, the company's timing couldn't be much better.

In Cary, Northwood Ravin has partnered with Highwoods Properties on the 215-unit The Lofts at Weston Lakeside. Weston is where the insurance giant MetLife is considering locating a new campus that eventually will employ about 1,300 people.

In Raleigh, Northwood Ravin's 134-unit St. Mary's Square project near Glenwood South will be among the first of many to open in downtown over the next 18 months. It will also be one of the smallest in terms of the number of units.

David Ravin, Northwood Ravin's president, says opening ahead of the competition is crucial. So is building in locations where additional projects are less likely to be proposed, such as Weston where Highwoods has been strategic about how it builds out the land it owns.

The Lofts are the second multifamily joint venture that Highwoods has done at Weston -- it earlier developed the 332-unit Weston Lakeside apartments with Crosland -- and its location on the edge of Lake Crabtree near Umstead Park is likely to be a major draw for tenants.

To stroll through The Lofts common areas and units is to be reminded of just how much of an arms race the apartment market has become. The complex is loaded with amenities that you would find in a high-end hotel: an expansive gym, club space suitable for hosting corporate functions, a rooftop deck and a saltwater pool.

The units feature 10-foot ceilings, granite countertops and stainless steel appliances -- all the finishings that tenants today have come to expect.

A 'hospitality influence'

Jeff Furman, development director for Northwood Ravin'sRaleigh operations, says the hotel resemblance is intentional. "Everything now has more of a hospitality influence," he said.

Northwood Ravin has preleased 28 percent of the units at The Lofts and 17 percent at St. Mary's Square.

Still, Ravin, who ran Crosland's apartment group for 14 years before it spun out and became Ravin Partners, is not nearly as sanguine about the Triangle apartment markets as some other developers.

"It's a good market. I'm nervous it's not a great market," he said. "I think we're going to test that pretty quickly."

At Crosland, Ravin developed some of the Triangle properties -- 712 Tucker and Oberlin Court, to name two -- that helped fuel the apartment boom by selling for eye-popping sums. Since leaving Crosland, he has partnered with Northwood Investors to create Northwood Ravin, which now manages more than 3,000 units in North Carolina and is developing projects in the Triangle, Atlanta, Tampa, Fla., and Richmond, Va.

Nervous about demand

Ravin agrees that demographic shifts now occurring in the country ultimately will benefit the apartment market. The percentage of the population that is age 25 to 34 is growing, and young people are waiting longer to get married and have children.

Rents also are still rising in the Triangle. The average monthly rent was $890 in the first quarter, up 2 percent from the same period last year, according to MPF Research, which analyzes apartment data in 100 U.S. metro markets.

But in markets such as downtown Raleigh, Ravin wonders whether developers are overestimating the demand among young renters for such units. The ability of owners to push rents also will be tied to job and wage growth.

Ravin said the rapidly recovering housing market is perhaps the clearest sign that the apartment market is headed for a correction, one likely to be more severe than previous downturns.

He predicts that over the next 12 to 18 months the market will bifurcate into the haves and have-nots, with some of the new projects prospering while others struggle. As some communities founder, investors' willingness to finance new projects will cool.

"It will stop as fast as it started," Ravin said.

Bracken: 919-829-4548

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