Bad news if you’re renting office space in Charlotte, but good news if you’re a landlord: The market is tightening up.
The office vacancy rate for the second quarter citywide was 13.5 percent, according to real estate-tracking firm Exceligent/Karnes’ latest report. That’s down from 14.5 percent during the same quarter last year.
The market for Class A office space – the nicest stuff – was even tighter, at only a 12.6 percent vacancy rate. Class B vacancy rates were 16.3 percent, and Class C, rated as “functional” space that’s below-market rate, was 18.7 percent vacant.
Here are some tidbits from the report:
▪ The total amount of office space in the Charlotte market – 49.9 million square feet – is barely up from 2011, when it was 49 million square feet. That shows how little building has been going on since the recession. At the same time, in 2011 there were 9 million square feet of vacant office space, and today there are only about 6.7 million square feet.
▪ The highest vacancy rate is in the East submarket, which runs out along Central Avenue and Albemarle Road. There, 25.8 percent of office space is vacant. The lowest vacancy rate is in the Midtown submarket, which covers areas such as midtown, Dilworth and Myers Park. Only 5.9 percent of office space there is vacant (But this is one of the smaller submarkets, square-footage-wise).
▪ Uptown had the highest average rents, at $28.58 a square foot. The East submarket had the lowest rents, averaging $14.28 a square foot.
Office construction is definitely picking back up. Uptown, there are three towers planned or underway. Another building is underway on Morehead Street, Ballantyne Corporate Park is starting a new speculative building and Lincoln Harris is building a pair of office buildings in SouthPark.