When it comes to experience and success in Waterfront real estate development, William G. (Gary) Allen is the man to talk to. For 14 years his pioneering company, WLC Waterfront Communities, LLC, has responded to the demand for waterfront property by developing and marketing 36 luxury waterfront communities in the southern United States. Mr. Allen’s exceptional business acumen, especially in the areas of sales and marketing, has made WLC one of the largest and most successful waterfront development companies in the nation.
A graduate of the University of North Carolina at Chapel Hill, Mr. Allen began his successful career in land development 37 years ago. He is passionate about meeting Baby Boomers’ growing demand for waterfront living, and continues to diligently acquire beautiful waterfront property in the best locations in the country.
Here Mr. Allen shares some of his thoughts on the present and future state of the real estate market.
How has the downturn in the real estate market affected your company’s growth and success?
It’s affected us in both positive and negative ways, as it has for everyone. On the positive side, there have been wonderful buying opportunities at the bottom of the market. On the negative side, there’s been a slow down in retail sales.
How do you successfully buy and sell in a soft market?
We’re able to buy successfully because we’ve been in the business for over a decade and know when premier waterfront properties are for sale. We are constantly reviewing the market and use high-tech methodologies to track properties that are coming on the market in Virginia, North Carolina, South Carolina, Georg ia,Alabama and the Gulf Coast. We’re able to sell property because we have substantial budgets, are skilled in pursuing off-site markets, and aggressively reach potential buyers from here to Canada. We’ve spent approximately $100 million to develop a huge database of people who want to buy on or near the water.
What are some of the strongest markets in the country today, and why have they escaped the market corrections experienced by other areas of the country?
The Texas coast is one of the strongest markets because it’s not overbuilt, so there was no real estate bubble. But to some extent Texas has been affected by the negative psychology that has impacted the real estate market nationwide. North Carolina has been affected by the downturn but not as badly as Florida. Overbuilding is what brought about the correction in the market. North Carolina hasn’t overbuilt, with the exception of too many condominiums on the coast. What waterfront properties are you currently developing and why were these properties selected? We’re currently developing two properties on the Texas coast between Houston and Corpus Christi. There are 22 million people in the state of Texas, and we’ve also got buyers interested from as far away as Las Vegas and southern California. People from southern California are interested because we’re offering the best prices on warm saltwater. We’re also developing properties in the
seacoast town of New Bern, NC; in Holly Ridge above Wilmington, NC; and in Myrtle Beach, SC. Although we do own property in Florida, nothing new will be built there for over two years.
What are the key factors you consider before purchasing waterfront property?
The property has to be near a market where people want to live, and there has to be as much waterfront as possible. We look for ways we can distinguish the project to make it highly competitive. For example, our communities include marinas and large lakes, and for one of our developments in Myrtle Beach, we built the largest swimming complex, commercial or residential, in the area. The key factors we consider are location, price, amount of waterfront on the property, percentage of wetlands and local amenities such as good highway access and accessible airports. How have you assembled one of the largest inventories of waterfront property in the southern United States? We’ve been in the market a long time and have located a lot of property for both immediate development and land banks.
What are some of the challenges of waterfront development and how do you meet these challenges?
The three biggest challenges are working with a myriad of state and federal regulations, designing a highly competitive community, and marketing the property at local, regional, and national levels.
What is your marketing approach for reaching prospective buyers for your communities?
Our approach is multifaceted and includes newspapers and magazines at the local level, and direct mail and website marketing at the regional and national levels. We also utilize real estate trade shows.
What makes your communities unique and appealing to Baby Boomers?
Research tells us that two-thirds of all Baby Boomers want to live on or near the water, so our waterfront niche has a broad appeal to this market. We also offer unique design themes such as Charleston, Mediterranean and Cape Cod. Every homesite has access to special amenities as well as those available to all residents.
What have you found to be the most important amenities Baby Boomers desire?
Security tops the list of desired amenities, which is why all of our communities are gated. Waterfront property and water views are also important to Baby Boomers, as well as being in an area that is easy to get to via good roads and nearby airports. Other popular amenities are marinas, jogging and walking trails, clubhouses, swimming pools and tennis courts. Oceanfront property has historically been the most popular for buyers of second-homes.
How has this changed now that the coasts are overcrowded, prices have soared and there’s been an increase in hurricane frequency and destruction?
I don’t think there’s been an increase in the number of homes impacted because hurricanes have always impacted the southeastern coastline. Once in a while hurricane frequency increases, such as when Florida had four hurricanes in one year. But hurricanes haven’t kept people from moving to the coast. High prices along the coast have resulted in an increase in the number of condominiums built. But the rapid run-up of high prices is over now. There will be some price increases but it won’t be so rapid as in 2004 and 2005. During 2004 and 2005, prices skyrocketed due to easy money and credit markets. In a year or two we’ll be
back to normal lending practices and as the dust settles on the recession, prices will slowly increase. There are approximately 50 million Baby Boomers heading for waterfront, so supply and demand will result in higher prices.
What innovations do you foresee in the development of waterfront properties?
Innovations will occur based on the results of consumer polls that reveal what amenities, designs and themes buyers prefer. The standard amenities will still exist, but consumer preferences will add some new ones. Our goal is to provide a product with a reasonable price that people will want to buy. Our target market is upscale buyers and we’ll continue to develop properties within their reach.
What are your predictions for the real estate market in 2008 and 2009?
The last quarter of 2007 we hit bottom, and the first half of 2008 will continue to be the bottom of the cycle offering the best buying opportunities. During the second, third, and fourth quarters of 2008 the market will still be anemic but will begin to recover and get better with each quarter. When we reach 2009, prices will be on the rise, but not at the torrid pace experienced in 2004 and 2005. By early 2010, the market will return to more normal growth and pricing.