UPDATED 5/26North Carolina’s economy began reopening last month but we’re just starting to get a fuller picture of how the COVID-19 shutdown has impacted some local industries and markets.
In real estate, data from April from the Wake County Register of Deeds office show residential sales starting to decrease. Last month, the number of parcels transferred by deed in the county was down 13.3 percent from March of this year and down 11.8 percent from April of 2019; historically, the spring months of March through May are associated with increasing sales as families prepare to move over the summer while the weather is good and kids are out of school.
In both 2019 and 2018 the trend line was upward at a nearly identical pace. For 2020 the trend line is flat at a time when it is anticipated to be up. Gov. Cooper issued an executive order closing some businesses on March 17.
Charles P. Gilliam, Wake County’s Register of Deeds, tracks and compiles county real estate transactions daily. He says there are two things that could be going on. Though real estate is an essential business under Gov. Cooper’s executive order, sellers aren’t as likely to be showing their homes and buyers aren’t looking at them due to social distancing. And two, the economy, more broadly, has people worried.
“Driving around with a real estate broker and looking at houses cuts against the thrust of social distancing, as does allowing people in who might be sneezing in your house,” Gilliam says. “You just don’t know. The other factor is, people who don’t have to buy but are looking to—if they can get a good deal, in a place they like—they are now worried they may not have a job. Maybe their business is going broke. They figure now is not a good time to be plopping down capital and getting tied into property.”
And though the early May sales data continue to confirm that sales are sluggish, the trajectory is not so severe as to indicate a real estate market recession.
“It is not that things crashed in the first [ten business days] in May,” Gilliam says. “It is not like we are going into a V. We are not on first side of the V so far, so for Wake, the real estate market is holding up a little better than many others, which is good.”
Numbers of deeds recorded reflect the velocity of real estate activity without regard to the dollar value of a transaction.
This tracks with what local real estate brokers say they are seeing. Frank DeRonja, owner of DeRonja Real Estate located in downtown Raleigh, says despite a strong first quarter, his agency is seeing sales volume dropping off around 35 percent in recent weeks.
“Up until all of this we had an inventory problem for many segments, price point-wise, in the Triangle,” DeRonja says. “We have found a lot of buyers stepped away from the process and the same amount or more sellers have stepped away, too, so the inventory problem remains. Good houses at sellable price points are still seeing multiple offers.”
DeRonja says the local real estate industry has adapted quickly to the crisis with agents showing homes virtually and conducting the bulk of the sales processes electronically. The state association of realtors also acted quickly, he says, to provide tools and support for brokers to be able to do business safely.
And though real estate sales are down, the data shows that lending was on the increase in April, due largely, no doubt, to rock bottom interest rates and homeowners choosing to refinance their mortgage loans. Potential sellers may also be taking out home equity lines of credit now in order to fix up their homes instead of listing them.
A deed of trust is the legal instrument used in North Carolina to secure a loan with real estate used as collateral
Gilliam says other factors could potentially be at play.
“People whose businesses have had to close may need to refinance now, to take equity out of their property in order to avoid going broke,” he explains. “They could be taking equity out of their homes and putting it into their businesses. Your small businessman, the person who owns the barbershop or small restaurant. If they happen to own property for their business, they may be refinancing or taking out brand new loans on existing property to raise cash. Certainly, there is a lot of capital tied up in real estate in Wake County and people are going to need to tap into it in order to survive.”
DeRonja says, while he expects the number of closings to continue to be fewer in May and June, the local real estate market will likely track with how quickly the economy recovers more broadly.
“In real estate, we are fortunate in that a transaction that didn’t happen in May or June still may happen later in the year, unlike buying a meal in a restaurant, for example,” he says. “If we have a really strong [economic recovery], then I expect to recapture some of these transactions that did not happen earlier.”
Raleigh and Wake County have an inherent advantage over other areas of the country, too, says DeRonja.
“Even through the Great Recession, we still had people moving here. Because of the attractiveness of the economy overall, the climate, the educated populace, it’s a dynamic and fun place to be. And that helps real estate through bad times.”
Jennifer Martin, executive director of Shop Local Raleigh
WEB EXCLUSIVE Jennifer Martin is the executive director of Shop Local Raleigh, a membership-based program administered by the Greater Raleigh Merchants Association to support and advocate for locally owned businesses. We spoke with Martin about what Shop Local Raleigh is doing to help small businesses during the shutdown and how business owners are planning for reopening.
What are some ways Shop Local Raleigh is supporting local businesses during the shutdown?
We’re trying to find ways to help all sectors of our membership. A lot is behind the scenes, amping up our website as far as gift cards, online shopping, coupons, creating lists of who’s still open, who’s offering specials on shipping, what businesses are offering first responder discounts.
Shop Local Raleigh’s online store
For retail, we set up an online shopping cart where businesses can upload all their inventory and sell it. Sales go directly to the business’s bank account and they can ship items to the customer. For retailers that don’t have their own online shopping carts, this was our way to help with online selling. We have a conglomerate collection of local products so consumers can shop on our website and get different products from different stores.
For any other business, whether it be restaurant or retail services, we created a gift card landing page, a platform where businesses can create their own gift cards and sell their own gift cards on our website where the money from the sale directly goes to them, the customer feedback, everything.
Businesses can also upload their own coupons for customers.
We are trying to source personal protective equipment (PPE) for our member businesses. If they’re going to have to wear masks, aprons, if they’re going to need sanitizing products when they reopen, maybe that is how we can make the biggest impact, by paying for that kind of stuff. We want to figure out how much is needed for all of our businesses and whether there is a way for us to purchase in quantity to help save costs.
We put a call out for an out-of-work graphic designer. A couple answered the call and one provided six designs. We picked one and created a T-shirt called “Here For Good.” Underneath it says “Helping NC Small Businesses.” For every shirt sold, the designer, Paul Friedrich, is getting a dollar from the sale. We used a local printer, Raleigh Screen Print, since they are also slow right now. We are looking at maybe using the funds from T-shirt sales as part of a recovery plan to help businesses buy PPE.
Considering it was pulled together in about seven days, I think it went really well. The community definitely supported it, we sold $30,000 worth of beer and all we did for five hours was just load cars with beer. I think because people knew we weren’t profiting, 100 percent of it was us doing a project to try and help businesses stay alive, they were really receptive to it and felt good doing it. People felt good getting out of house.
(Editor’s note: Brewgaloo, Raleigh’s big annual beer festival, has been rescheduled for August)
Do you have any similar drive-through events planned?
We talked about, if we were to source PPE for our businesses, setting it up like a Brewgaloo format where businesses could drive through and pick it up.
We worked with [downtown church] Ship of Zion. They needed food for the homeless population they serve so we worked with our network to contact businesses to try and help. Donors gave the church money for a small budget to provide the meals and we served as a resource connecting with restaurants we work with to try and get them business that way.
We are looking at how to do a food truck event. So many food trucks have been shut down and a lot are heavily dependent on spring festivals so we are trying to figure out a way [to help them].
Again for beer, we are working with breweries to try to coordinate a way to do a “fire sale” on kegs, so they don’t have to dump them and instead sell them to people at home with kegerators. We are looking at doing an online portal where people can pre-order their kegs and do another drive through pickup.
How are the business owners you talk to feeling about the future?
It depends on what industry you talk to and what day it is.
Estheticians, massage therapists, hair salon stylists are very optimistic because they offer services that we need. The downside right now, though, is a lot of them have zero income and are on a lower comeback plan. Massage therapists, for example, if they used to take their towels and sheets home with them to wash, it’s really not safe for them [to do that now] so they are looking at having to hire professional cleaning services. After being shut down, those are expenses that were not anticipated when they set the budget at the beginning of the year.
Retail is really tough. For a lot of businesses there is an unknown, will they survive until the reopen happens? Rent payments are due. Some people may have deferred payment but the downside of that is payments are going to be due when they come back. So if they have been closed, how are they going to get that money to repay rent right away?
The other unknown is, if [businesses] reopen, will their customers feel safe coming out again? With restaurants, how long before people feel comfortable sitting inside a restaurant again?
Fitness studios are in the last phases of the reopening as well. A lot are doing Zoom and online classes but when they do come back, will they still have to limit class sizes and do extenuating cleaning?
There is optimism in knowing we as a community will wait for them but businesses are going to have shift the way they operate, in a sense that they’re going to have to buy extra stuff to be able to serve their clients in a manner that is safe. Some of the conversations I’m having are what will our new normal look like? None of us know.
Are you finding any silver linings to this situation?
I have been encouraged by a new awareness of the small business community. [It’s not that] there wasn’t an awareness before but there has been an “aha moment” for people, of ‘my neighbors really need me to spend my money with them.’ It’s great we’re seeing people [saying they support local businesses] on social media, but it’s going to have to be putting your money where your ‘like’ is. Make sure you are truly investing local, spending local and if there is a local service or provider that has what you need, try and seek it out as much as you can.
In the long run, if we don’t do things like this as community together, we are going to start to see a very different landscape, one with a lot of empty storefronts. That is the fear we have. We don’t want to see any more businesses lost.
Small businesses are the community supporters, the ones that give to our kids’ school auctions, sponsor teams, give gift cards, donations to first responders. It is so easy to ask them to support our community but now they are asking and they need the community to respond.
When it comes to working during the shutdown, salon, spa and other personal service employees have the fewest options.
Jenny Abhau has been thinking hard about ways to help her staff of around a dozen during the coronavirus shutdown.
Her massage therapists and estheticians legally can’t work at all in their chosen professions and Abhau—the owner of White Dahlia, a day spa in north Raleigh that’s been operating for 14 years—says, beyond encouraging them to apply for unemployment insurance, she wants to help them out.
Jenny Abhau of White Dahlia
“Their options are really limited,” Abhau says. “I told my employees if they want to come in and help me paint and clean, I could pay them an hourly wage. I know some of my employees have gotten temporary jobs. It’s hard because their skill sets are so specific and right now, they just can’t do anything.”
Raleigh is home to more than 34,000 small businesses and of those, nearly 750 offer person-to-person services. These businesses employ hair stylists, makeup artists, estheticians, massage therapists, laser technicians and countless other professionals. Unlike restaurants, many of which have chosen to continue operating with curbside and delivery services to help generate money during the shutdown, personal services professionals and the business owners that employ them don’t have that option.
“Right now, there’s not a place on Planet Earth our estheticians and laser providers could work in their professions,” says Kile Law, who owns Blue Water Spa in northeast Raleigh with her husband, Dr. Michael Law. “They are unemployed and unemployable, so it is very difficult and they are very eager to return to work when it is safe to do so.”
But business owners like Law and Abhau are finding creative ways to help their businesses and staff hang on.
White Dahlia is membership based and Abhau says she sent out an email to the spa’s some 600 members offering to pause their memberships while the spa is closed but asking them, if possible, to continue paying for their monthly memberships in exchange for a free massage to be redeemed when the spa opens again.
“That enables me to pay my therapists for painting and cleaning,” Abhau explains. She also gave members the option to tip their favorite therapists while they’re out of work.
“Our therapists have been with us for a long time and our members are concerned about them,” Abhau continues. “Lots of people wrote in saying, ‘Yes, keep my membership, yes, I want to tip so and so for the month, keep us in the loop.’ That was a great way for our members to show our therapists how much they are concerned about them and love them.”
As with restaurants, selling gift cards to use later has been another way for spas and salons to make some money while their businesses are closed.
Blue Water is running a promotion where anyone who buys a gift card for themselves automatically buys a free spa service for a front line healthcare worker.
“Sometimes people have a hard time with self care and can be given to feeling like it’s a selfish endeavor,” Law says. “This lets people know, during this time, that giving to yourself can feel good because you’re giving the same thing to a healthcare worker.”
Other ways to help out?
“Leave a 5-star Google review or shout out your favorite [personal service professional] on social media,” Abhau suggests. “It’s so easy, it doesn’t cost a thing and it gets your favorite person, favorite stylist or esthetician or therapist really seen in online searches.”
As with other industries and organizations, fundraising models for workers—such as the NC Restaurant Worker Relief Fund and Ashley Christensen’s and the Frankie Lemmon Foundation’s Triangle Restaurant Workers Relief Fund—are popping up to help provide some assistance for personal care professionals.
The Raleigh Community Groomers Fund is raising funds for “hair stylists, barbers, massage therapists, estheticains and nail techs who are completely shut down, can’t perform services at home and don’t have the ability to offer delivery or cursbide services during this COVID-19 pandemic,” according to the group’s social media. Anyone who wants to can make a donation to the fund in the name of their favorite business; at the end of the collecting period, all the businesses that have been nominated will split the money raised. Additionally, Raleigh-based Virtue Labs is aiming to raise $100,000 for its employees with a GoFundMe campaign—it had raised over $16,000 by mid-April.
But the best thing Raleigh residents can do, Abhau and Law say, is to buy gift cards and support your personal care service providers in any way you can.
“[Blue Water Spa] has never been in a position where we needed to ask for help,” Law says. “Now, people come to us asking for help and we ask the community to please help so we are able to complete the circle and help our community. If you’ve ever appreciated work Blue Water Spa has done, we are asking to please help us.”
To donate to the Raleigh Groomers Fund, visit raleigh19.com.
Local restauranteurs grapple with whether to stay open or close completely during the coronavirus outbreak.
When Gov. Roy Cooper ordered North Carolina’s restaurants to close their dining rooms and patios in mid-March, local responses about how to go forward were mixed.
Some of the bigger names in Raleigh’s culinary industry, such as Garland owner Cheetie Kumar, shut down all operations right away. Some restauranteurs, including Bida Manda and Brewery Bhavana owner Van Nolintha and AC Restaurants’ Ashley Christensen, experimented with offering curbside pickup and delivery services, but ultimately decided to close their doors as well.
But the majority of Raleigh’s independent chefs and restaurant owners decided to continue operating, tweaking or paring their menus for curbside pickup and/or delivery and pivoting to new service models such as grocery markets.
While none kid themselves that they’ll turn a profit during the shutdown due to a number of factors, restaurant owners and chefs say their reasons for deciding to continue operating hinge on hopes of being able to save at least some of their employees’ jobs and being able to continue to serve, nourish and care for the community.
Jennifer Noble Kelly of JNK Public Relations
“Closing restaurants, whether to do takeout only or closing completely, is the hardest thing any of these professionals have had to do,” says Jennifer Noble Kelly, founder of JNK Public Relations, who works with restaurateurs and businesses across the Triangle. “This is an industry of survivors already adapted to existing on the smallest margins and literally working their fingers and feet to the bone. What impresses me is how seriously I see them all take each decision they have had to make, from high end restaurants down to food trucks. No one is doing anything flippantly.”
Messages from Industry Leaders
While the CDC has determined that coronavirus is not food-borne and restaurants can continue to operate safely as long they observe health and safety guidelines and practice social distancing, many industry leaders, local and nationally, say they just don’t feel that is the reality.
“I sat in an office and had conversations for over five hours straight with the dozens of managers and more than 200 hourly employees to tell them I could no longer offer them employment,” wrote Ashley Christensen, a Raleigh luminary and the reigning James Beard award winner for Outstanding Chef, in an editorial in the News and Observer on April 15.
Ashley Christensen
“And I’d do it again in order to prioritize public health,” Christensen continued. “I’d do it again to keep my team safe from harm … to prevent even one person from contracting coronavirus in one of my restaurants. But just because it was the right thing to do didn’t make it any less traumatic or any less devastating … didn’t make the consequences any less severe or real for the employees out of work, or the farmers without clients.”
“The right thing to do.”
Christensen doesn’t mince words. She doesn’t say it was the right thing to do for her organization or the right thing to do at this stage of the pandemic. She says it was the right thing to do, full-stop, and it’s a message that has been consistent for her in public forums and on social media channels since she closed Beasley’s, Poole’s Diner and Poole’side Pies, along with Death and Taxes and Chuck’s, at the end of March.
So what does that mean for other chefs and business owners when someone like Christensen takes such a strong stance right off the bat?
Tom Mukoyama of Kanki and Tonbo Ramen
“We have felt pressure,” says Tom Mukoyama, the corporate general manager for the Triangle’s three Kanki locations and their sister restaurant, Tonbo, located in downtown Raleigh. Kanki locations at Crabtree Valley Mall, in north Raleigh and in Durham are still offering curbside pickup. Tonbo has stopped operating completely during the shutdown.
“I talk with my team every week and we try to evaluate what’s the best goal,” Mukoyama continues. “As far as feeling pressure to close, some of that is more internal. More and more people have come to me saying, ‘I want to cut back my hours, I am getting more afraid because I have elderly relatives living with me and people who are susceptible.’ We are providing masks and gloves for everybody and putting sanitizers by the door. So we are trying to balance our cash flow with the staff we have because we don’t know how long this will last. We took that into consideration.”
Closing Not an Option
For chef Teddy Diggs, who owns Coronato, a Roman-style pizza restaurant in Carrboro, closing completely, he says, was never an option.
“The reason we are in this industry is to be able to provide comfort and joy for people, no matter what is going on in the world,” Diggs says. Coronato is offering both curbside pickup and limited delivery and Diggs says he is pleased with how well that strategy has been working in terms of sales volume.
Teddy Diggs of Coronato Pizza in Carrboro | Photo by Carolina Stamey
“We want to keep people happy and healthy, so when we were faced with this challenge, it was never an option for us to say we are not going to do this, because that is our whole mission of being a restaurant. We have an opportunity here to make an impact and do what we want to do that gives us joy.”
Diggs says he looks at other chefs’ decisions to close as a matter of personal opinion, to be taken in the context of where they’re operating—in the Triangle versus New York City, for instance—or how large their businesses are.
“There are mixed messages from the industry,” Diggs says. “There are industry leaders saying it is not responsible for us to open and serve food and there are industry leaders who say that it is our responsibility to be as safe as possible and be a sense of normalcy and joy right now, when people need it most. I tend to agree with the latter. I believe mental health connects with the physical health and whatever we can do to uplift spirits will, in turn, strengthen the immune system.”
New Business Models
Drew Smith, the executive chef at the 6 month-old kō•än in Cary, shares Diggs’ commitment to continuing to serve the community in a practical way during the shutdown. Smith says following a trip to the grocery store in the early days of the coronavirus outbreak, he was shocked to find the shelves bare—sold out of mealtime staples such as chicken, pork, beef and bread. Around the same time, in a conversation with one of his restaurant’s distributors, Smith learned that the supplier was sitting on $36 million in inventory that would spoil within two weeks.
Drew Smith of kō•än in Cary | Photo by Carolina Stamey
“I woke up like from a dream at 4 o’clock in the morning realizing there were all these people who have tons of food and all these people who can’t find food,” Smith says. “We needed to be the connection, the link that is broken.”
So kō•än launched an online grocery market stocked with products from local and national purveyors as well as specialty items made in the restaurant and household essentials such as toilet paper. People can order items online, as well as meals from a limited restaurant menu, and pick up their goods or have them delivered to their front doors.
The community response, especially to the online market, according to Smith, has been overwhelming.
“It just seemed like an obvious solution,” Smith says. “I messaged pretty much everyone I know at the top of the food world in Raleigh, like ‘Guys, this could really save jobs, it could save restaurants and food purveyors.’ But they seemed kind of to brush it off.”
Elsewhere in the country, it’s an idea that’s gaining traction. In some areas, people can go to a website to search pop-up markets for the items they need and because that food is coming from a different supply chain, it relieves some of the burden on grocery stores, provides another option for those who don’t want to go to the store and creates opportunities to diversify revenues from food sales.
Adjusting in an Outbreak
The country (and the world) have never experienced anything like the COVID-19 outbreak in modern times and most of us are left scrambling for the best information on how we should respond in our own everyday lives. While there is mixed messaging, pressure, and, occasionally, judgement, coming from our peers and contemporaries about how we should be behaving, most of us are just trying make the best decisions we can with the information we have—including businesses.
Scott Crawford of Crawford and Son | Photo by Jessica Crawford
“Most people have said this is a very personal decision, a decision that everyone needs to make for themselves and ask that hard question [of whether to close],” says chef Scott Crawford, owner of downtown restaurants Crawford & Son and Jolie. Crawford and four other members of his team are operating curbside pickup services with a repurposed menu offering comforting dishes.
“I definitely have not felt pressure [to close] but I can see why people are making that decision,” Crawford says. “I have certainly considered that option.”
“I think most people are just staying in their own lanes right now,” says Kristen Baughman Taber, the founder of Tabletop Media Group, who also works extensively with local chefs and culinary businesses. “For restaurants staying open, health and safety is really important to them, for their staff and customers, and, of course, they are following CDC and local health departments’ guidelines and taking huge precautions.”
Kristen Baughman Taber of Tabletop Media Group | Photo by Stacey Sprenz
Kelly of JNK Public Relations adds that, for those who aren’t staying open, they are finding other ways to serve and care for their communities.
Christensen, for instance, has been advocating tirelessly for restaurant workers across the board. She launched the Triangle Restaurant Workers Relief Fund in partnership with the Frankie Lemmon Foundation and convened the Independent Restaurant Coalition to lobby politicians to provide substantial assistance to restaurant workers in the federal CARES bill and to create a $100 billion stabilization fund for restaurants—the vast majority of which are independently owned—that generate $1 trillion annually to the U.S. economy. Other restaurant owners that have decided to close their doors are preparing meals for their employees and helping them out with their rent, healthcare and other needs while they’re out of work.
“The way I see it is, everyone is trying to figure out, ‘What role do I play in this, how do I do it in a way that resonates with me and my business and how I can make a difference?’” Kelly says. “Everybody has had to find a way to use their energy towards contributing to this devastating situation.”
WEB EXCLUSIVE The May issue of Raleigh Magazine will be on stands around town and delivered to your doors in just a few days! If you can’t wait until then, here’s a quick look at some of the stories we have in store.
Crawford and Son
Hard Times, Tough Decisions
Gov. Cooper’s shutdown order did more than close restaurant dining rooms, bars and patios—it put local restaurant owners and chefs in a bind, torn between whether to close for the safety of their staff and patrons or whether to stay open and offer food for pick up and delivery, to continue to serve the community and to try to salvage some of their workers’ jobs. While local big name chefs, including Ashely Christensen, have been vocal about choosing the former route, we spoke to several local restauranteurs who decided to remain open. We also look at some creative ways restaurants are adapting during the coronavirus outbreak.
Union Special Hash
Stay In and Brunch
Soon, it’s gonna be May, and May means brunch! While we can’t enjoy meals and mimosas on our favorite sunny patios this spring, we can do the next best thing and enjoy them at home. We asked chefs from some of Raleigh’s best local brunch spots for the recipes to their most popular dishes. Think classics such as chicken and waffles, biscuits and gravy, shrimp and grits, as well as more adventurous fare including empanadas, cocotte and huevos motuleños. And if you don’t feel like going to the trouble of cooking and washing up? Nearly all of these dishes are available to pick up for at-home brunching.
Unemployed and Unemployable
While restaurants at least have the option to remain open in a limited capacity, there’s a whole subset of service industry workers who do not: those who work in the personal care industry. We spoke with local salon and spa owners about how their employees are coping while they legally can’t work and about ways you can support your favorite hair stylists, massage therapists, nail technicians, laser technicians, estheticians—and the businesses that employ them.
Chef Kenny Gilbert and Oprah
From Chef, With Love
This “Top Chef” star has cooked for everyone from Oprah Winfrey to Samuel L. Jackson and his new north Raleigh spot, Cut & Gather, is on track to open soon after the shutdown ends. We asked chef Kenny Gilbert to share some of his favorite recipes that will appear on the menu and to give us the scoop on the stories behind them. From a cocktail made with moonshine to a S’mores-inspired dessert, to Southern-inspired apps and entrees in between, it’s a collection of dishes that will make your mouth water.
