Office buildings on Charlotte’s skyline are commanding record-high rents, as vacancy stays tight and the region’s economy grows, according to a new report Friday from brokerage firm JLL.
In the annual Skyline report, JLL looks at rents in the buildings that make up downtown skylines, as the name suggests, in the largest markets across the U.S. This year, rents in the Charlotte skyline buildings jumped 4.9 percent. That pushed them to a record high of $30.95 per square foot, JLL said, and the “trophy” buildings – the newest or most prominent – are seeing rents above $35 per square foot.
“Due to a large millennial population migrating to uptown and adjacent neighborhood South End, companies are reaping the benefits of a large college-educated workforce to pull from,” said Paul Hendershot, director of research for JLL Carolinas, in a statement. “Traditionally law firms, financial institutions and other professional services groups were the main drivers of leasing activity within Skyline buildings.”
Now, with companies like AvidXchange growing rapidly, there’s the potential for technology firms to drive more of that activity, he said.
Here are some of the key numbers from this year’s Charlotte Skyline report:
▪ 1.5 million: Square feet of office space under construction.
▪ 8.9 percent: Vacancy rate for buildings on the Charlotte skyline. That percentage falls to just 2.9 percent in the “trophy” buildings.
▪ Five: Older office buildings that are undergoing major renovations, including adding shops and restaurants on the ground floor, to keep up with new construction. Those include First Citizens Bank Plaza, Bank of America Plaza, 400 S. Tryon and 300 South Brevard.
▪ $148.5 million: Price paid for the BB&T Center, one of the office buildings bought by investors over the past 12 months.