Charlotte office space vacancy still tops US average. But that may change soon
Charlotte’s office vacancy rate is at a standstill — but perhaps not for long — as the city’s office-using job sector grows and office space construction comes to a pause.
The vacancy rate remains higher than the national average, sitting at 22.2% for the second quarter of the year, according to a July report from commercial real estate firm JLL. It’s a 0.2% decrease from the year’s first quarter and is in line with what the market has seen since mid-2024.
The national average is 19.4%, according to a June National Office Report from real estate research firm Yardi Matrix.
But demand for office space is high, as shown in the past quarter’s leasing activity and the increase in jobs across the professional, financial and tech sectors. All of which utilize office space.
“Traditionally, office-using job growth was a direct correlation with the amount of office space that was leased… For a little while that relationship broke down during COVID,” said Chuck McShane, director of market analytics with real estate research firm CoStar.
“That relationship is back. Job growth is driving most of the new leasing going forward.”
New Charlotte leasings and job growth
Charlotte leads the 25 largest office markets in office job growth, according to Yardi’s report, beating out cities such as Atlanta, Miami, Seattle and Austin, Texas.
As of April, Charlotte saw a 3.2% year-over-year increase in office employment, “more than double that of any other top market,” the report said. It’s also a “hot spot for corporate relocations.”
Corporate relocations and expansion are stabilizing the office vacancy rate, JLL noted.
For instance, uptown’s One South building saw its largest leasing deal with the addition of Trimont, the leading commercial real estate loan services provider in the U.S. That brought the building’s occupancy rate over 75%.
South End’s 110 East also saw high leasing numbers, bringing in Coinbase, Florida-based SouthState Bank and an unnamed tenant.
When the building opened last March without pre-signed tenants, it caused the city’s vacancy rate to increase. But now the building is about 37% occupied.
And more companies are interested in calling Charlotte home.
New York City-based Citigroup is planning to hire 510 employees and invest $16.1 million to set up a division in Charlotte. And AssetMark, a financial advisor company based in California, said it would bring 252 jobs to the city and invest $10 million.
Charlotte’s office space construction
A future factor that will affect Charlotte’s office vacancy rate is office space construction. Or lack thereof.
Besides 150,000-square-foot office space being completed in Plaza Midwood at the mixed-used Commonwealth project, no new buildings are starting construction this year, according to JLL.
The decline in office construction can be attributed to COVID and high interest rates and costs. It’s a similar situation that retail buildings faced during the Great Recession, McShane said.
The combination of e-commerce and decline in shoppers led to a rise in vacant retail space, McShane said, leaving banks uninterested in financing new shopping stores. The same thing is happening with office space.
“One of the impacts of COVID was uncertainty about the future of office (space), which led to not much office being constructed,” McShane said. “Financing for office is really difficult to get now at this point. There’s skepticism.”
But the halt in construction could be a good thing for the office vacancy rate. It increases demand for existing spaces, especially in older buildings with feweramenities.
About 82% of vacant office spaces were in buildings constructed prior to 2015, according to JLL’s first quarter report.
The lack of new buildings gives these older properties a chance to renovate, like the city has seen with One Independence Center at 101 N. Tryon St., One South and 550 South, the former NASCAR Plaza building.
Investors are taking notice of the decline in construction as well.
It’s providing opportunities for older buildings to be purchased at a lower cost so investors can pour money into renovations, as is the plan with 525 N. Tryon, which was recently purchased by Highland Ventures.
But a speculative downside to the lack of construction is when there’s not much space left for the city’s increasing office-job sector.
Will that happen anytime soon? No. There’s plenty of space for corporations to continue to relocate or expand in Charlotte amid the 22% of unoccupied office space.
And talks of office space are still part of future developments, including the Queensbridge Collective project, which developer Riverside Investment & Development and Woodfield Development said would start construction this year. There’s also the mixed-use Carson & Tryon project, which filed for several construction permits in October according to the Charlotte Ledger.
It’s unclear if either of those properties have a start date on their office space construction.
But if Charlotte remains a hotspot for corporate relocations and expansion, maybe that will lead to new construction.
“Job growth is going to be the driver in everything moving forward,” McShane said. “If we do have that demand from companies, that could lead to kicking off new buildings in the future. It’s just going to take more demand than in the past to start new construction.”
This story was originally published July 21, 2025 at 9:49 AM.
