Here’s some good news for those building office towers: The city’s office vacancy rate is still falling, meaning there’s an appetite for more office space.
The news isn’t so great for those looking to rent office space. Because of the tight supply and growing demand, rents are going up.
That’s according to the latest quarterly report from Xceligent Karnes, which tracks vacancy rates, space under construction and rents. The citywide vacancy rate was 13.3 percent in the third quarter, down from 14.4 percent in the same quarter last year and 17.1 percent in 2012.
The average rent was $24.16 a square foot, up from $21.75 four years ago.
Those trends are helping to drive the surge of office construction in Charlotte. New buildings are underway or planned uptown (300 South Tryon, 615 South College, Tryon Place), in Midtown (500 East Morehead), SouthPark (Capitol Towers) and Ballantyne (the Brigham Building).
Here are some other facts about the state of the Charlotte office market:
▪ Uptown commands the highest rents, averaging $28.86 a square foot. SouthPark is second at $26.47, and the Ballantyne area is third, at $24.73.
▪ The lowest average rent is in the east submarket (defined as east Charlotte roughly between Idlewild Road and Plaza Road Extension), at $14.27 a square foot.
▪ About 2.3 million square feet of office space is under construction and another 8.5 million square feet proposed in the Charlotte market. Compare that to the deep freeze in 2012, when only 25,000 square feet of office space was under construction and 4.8 million square feet proposed.