Q3 Review: The State of Charlotte Office
New construction deliveries in Q3 caused rent and absorption to rise and vacancy to decrease.
October 09, 2019
- New construction deliveries in Q3 caused rent and absorption to rise and vacancy to decrease. A major Uptown development, Legacy Union Phase I, delivered and opened doors to tenants in Bank of America Tower. Legacy Union Phase II and III are expected to deliver by 2021, and already have leases out for notable companies like Honeywell and Deloitte. Large firms already located in the newest Tower are Bank of America, KPMG, and Parker Poe.
- While Uptown has long been the anchor of Charlotte’s financial industry, South End is becoming a destination for Tech shops. Firms like LendingTree, Lowe’s, Dimensional Fund Advisors, and Ernst & Young have all pinned South End as the ideal location for tech-based operations. DFA and E&Y occupied spaces this year, while LendingTree and Lowe’s will absorb space in new developments upon their completion.
- New development in Charlotte’s CBD is causing suburban nodes to increase the livability and amenity-offerings of their submarkets as a push to retain tenants and workforce. SouthPark is leading the way with a massive city-backed initiative to increase the walkability of the submarket, and Highway 51/ Ballantyne recently announced plans to convert a golf course into an “urban, walk-able” 25-acre town center.
- Even with 2.2M sf completed in 2019 and another 2.9M sf under development, vacancy will remain at or below current levels. New construction is breaking ground with large blocks pre-leased and minimal vacancy. Tenant demand will continue to expand through local organic growth and migration and expansion from firms relocating to the Charlotte area.
Source: JLL Research