Why an uptown Charlotte office tower sold for less than half its prior price
Another Charlotte office tower has sold at a discounted price, which may mark the start of a renovation period for the aging building. But the reduced price point is part of a growing national trend as office vacancies remain high and office mortgage loans mature.
Uptown’s Charlotte Plaza at 201 South College St. was bought for $70 million by Florida-based Morning Calm Management and California-based Praelium Commercial Real Estate, according to a news release from commercial real estate firm CBRE, which brokered the deal.
The purchase price is 56% less than the $160 million paid by previous owner Rabina Properties, which is based in New York, added in 2015.
The building’s $120 million loan with Wells Fargo matured in January 2023, The Charlotte Business Journal previously reported, and CBRE listed the building for sale last year.
The discounted price and the loan’s default are becoming a frequent scenario within the nationwide office market, according to real estate research firm Yardi Matrix, which is based in California.
In 2021, the amount of office building transactions that sold at a lower rate nationwide when compared to their prior sales price was about 20%. That increased to 46% this year, according to the firm’s August National Office Report.
And as of July, about 14,000 office buildings in the U.S. have loans that either have already matured or will do so by 2027, the research firm continued. Those loans are worth almost $290 billion.
Charlotte’s office vacancy versus national trends
What does this all mean for Charlotte? Well, the city isn’t leading in discounted sales and defaulted loans, though some buildings have experienced both.
But the city’s office vacancy is still high, which may lead to more owners and lenders selling off the distressed property. However, with slowing office construction and a rise in office-using jobs in the city, expect investors with more capital to be highly interested in the discounted properties.
As of July, Charlotte’s office vacancy sits at 22.2%, according to a July report from commercial real estate firm JLL. It’s inline with what the market has seen since mid-2024. The national average is about 19.4%, according to Yardi.
But alarms aren’t ringing in Charlotte. Demand for office space is increasing and that’s in direct correlation to rising corporate relocations and jobs across the professional, financial and tech sectors. All of that utilizes office space.
Charlotte leads the 25 largest office markets in office job growth, according to Yardi, beating out cities such as Atlanta, Miami and Seattle. As of June, the city’s seen a 2.8% year-over-year growth in office-using jobs.
Office sales and defaulted loans versus national trends
When it comes to office sales, two recent deals stemmed from defaulted loans: the Wake Forest University Charlotte Center at 200 N. College St. and 400 South Tryon. Both sold for discounted prices at $32 million and $36 million, respectively, as previously reported by the Charlotte Business Journal and Charlotte Ledger.
A third building, 525 N. Tryon, also sold at a lowered price of $24 million, down from the almost $100 million county appraisal value.
Nationally, more than 3,200 office buildings have sold since 2023, according to Yardi. These properties have had two or more sales to compare prices. Of those properties, more than 42% sold at a lower price than previous sales.
The issue is exacerbated in central business districts, where 70% of office building have sold for lowered prices since 2023.
Delinquency rates have also increased, Yardi continued. Looking at commercial mortgage-backed securities, which is a type of loan, delinquency rates increased to 11% in June, according to Yardi and Trepp, a New York-based real estate data and analytics firm. It’s a 3.5% increase from June of last year.
What to expect for Charlotte’s office market
Again, Charlotte isn’t leading the pack for office building sales or delinquent loans. Yardi’s report mentioned that office space in Charlotte’s suburbs also have seen discounted sales, noting the purchase of an office campus in Fort Mill, South Carolina, this year that sold at a 17% discount.
But Charlotte’s office construction has slowed. Besides the mixed-used Commonwealth project in Plaza Midwood, no new buildings are starting construction this year, according to JLL.
At the same time, office demand is increasing, as seen by leasing activity.
Take South End’s 110 East office tower, for example. Last year, the building was practically empty. In August, the building gained its anchor tenant with First Horizon Corp., which will take over the top three floors of the building.
Now the tower is 70% occupied.
Increase in demand and a decrease in space may lead to a crunch in the future, but that scenario will lead to more investors purchasing aging or defaulted building, especially at lower prices like Charlotte Plaza.
About 201 South College
The 27-story Charlotte Plaza was built in 1982 and renovated in 2018 by Rabina Properties, which bought the building in 2015.
The close to 644,000-square-feet tower is anchored by STK Steakhouse and also provides access to Overstreet Mall.
The building is about 32% occupied but CBRE said occupancy levels historically stood at 90%.
It’s unclear whether the new owners will renovate the 43-year-old building but that has been the norm with other recently purchased office spaces. Highland Ventures, which bought 525 N. Tryon, is planning a $10 to $15 million renovation.
In the release, CBRE’s vice chairman Patrick Gilda said the sale shows that building such as Charlotte Plaza are still an asset, even with the vacancy rates and market conditions. He agreed that demand is high and space is scarce.
Charlotte will just have to wait and see how many similar stories start to sprout up in the future.
This story was originally published August 29, 2025 at 5:20 AM.
