Bank of America is set to move out of two floors in the BB&T Center, leaving the building altogether and creating what is expected to be the largest block of vacant office space in uptown Charlotte.
The bank confirmed Wednesday that it is not renewing its lease for floors 11 and 12. The move strips the 22-story building of its biggest tenant but also creates a 180,000-square-foot, three-floor chunk of contiguous office space which some say could be a boon to economic developers in their efforts to lure companies uptown.
Ted Lee of Spectrum Properties, who handles leasing for the building, said hes confident tenants will be found for the former Bank of America space. We have a lot of interest, he said.
A spokeswoman for the bank said several lines of business are in the building but did not elaborate. She said the employees will be relocated to Gateway Center, where the bank already has operations, on West Trade Street near Johnson & Wales University.
Its not the only instance of Bank of America consolidating operations in recent years. Other consolidations have been taking place across the country as the bank reduces the amount of space it occupies. In its Corporate Social Responsibility report, released this week, the bank said it reduced its occupied space by 4.75 million square feet in 2012.
The spokeswoman would not comment on whether the relocation is part of Project New BAC, chief executive Brian Moynihans wide-ranging cost-cutting initiative.
Its not the first time Bank of America has moved out of space in the BB&T Center. Lee, of Spectrum Properties, said the bank occupied the 13th floor until about a year ago. The bank also used to occupy the 22nd floor, which remains empty and has about 20,000 square feet. Bank of Americas leases for floors 13 and 22 expired this year, according to Spectrum Properties.
Their strategy has been, for at least the last couple of years, to move into the buildings that they own, Lee said, such as One Bank of America Center and the Transamerica Building.
Once Bank of America leaves the BB&T Center next year, it will have a roughly 200,000-square-foot void spread across floors 11-13 and 22, and BB&T will be the largest tenant in the building.
According to its website, BB&T Center has about 200,000 vacant square feet. Its total square footage is 553,056, meaning the vacancy rate is roughly 36 percent. The building is categorized as Class B, considered mid-tier office space.
Michael Smith, president and CEO of Charlotte Center City Partners, sees the 180,000 square feet coming on the market as an opportunity. He said the city has been passed over by companies in recent years because of a shortage of available office space thanks to too few projects coming online following the recession.
If we do not have big blocks of space, we will not only lose projects, but well have projects that wont even look at Charlotte, and thats the scariest part, he said, adding that office space is the infrastructure of economic development.
One frequently cited example of the role of contiguous office space in luring companies is MetLife. The insurer this year announced it would place its U.S. retail hub in Ballantyne, where it will occupy about 340,000 square feet, taking up the entire 10-story Gragg Building and part of the 10-story Woodward Building.
Smith said the space Bank of America is exiting in the BB&T Center will be available for economic development efforts.
This will be an asset for us to market so that we can compete for jobs that are being considered for relocation, he said.
Andrew Jenkins, managing partner for Charlotte-based Karnes Research Co., said once the 180,000-square-foot space is available in the BB&T Center, the second-largest contiguous block in uptown will be in Fifth Third Center, which has a roughly 118,000-square-foot segment available.
CIM Group, based in Los Angeles, owns the BB&T Center, which dates to the 1970s.
On Wednesday, the 13th floor was empty, stripped of flooring and wall coverings, leaving only bare concrete. Crews were doing floor work to prepare it for the next tenant, whoever it will be.