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Charlotte’s office and industrial markets improved during the third quarter compared with last year, as vacancy rates fell and rents increased.
The Queen City also may benefit from the national attention it received while hosting the Democratic National Convention in September, according to the latest report by Cushman & Wakefield / Thalhimer.
“Several large corporate relocation candidates are now rumored to be interested in the region,” the report says. Investors also remain interested in the city; well-capitalized investors are eyeing office properties including LakePointe, Vanguard Centre, ArrowPoint Office Park and Parkways’ six-building suburban office portfolio.
Investors also are interested in Charlotte’s industrial market. Last quarter, for example, STAG Industrial Inc. completed two acquisitions, one in Pineville and one in Huntersville. Two large, long-vacant buildings were bought: Beacon Partners bought the UAV Building in Fort Mill, S.C., and The Silverman Group acquired the former Lucent building at 10000 Twin Lakes Parkway.
Office vacancy rates dipped to 12 percent during the quarter from 13.1 percent during the same period last year. Direct asking rents rose nearly 4 percent to $18.94 per square foot a year.
The industrial vacancy rated dipped slightly to 11.8 percent.
The area still will struggle as developers and investors wait before making long-term decisions to see how the U.S. political landscape and economic climate unfold during the next few months.
Tenants also will try to negotiate for good deals, including cheaper rent and extended lease terms, but will have increasing trouble doing so as vacancy shrinks.
On the industrial side, the firm expects to hear of build-to-suit projects and two to three “sizable” sales of buildings to investors. But continued softness in leasing demand and uncertainty in the global economy will keep developers cautious in moving forward, the report says.
