Business

Offices planned for long-dormant site

The way old buildings are demolished in Charlotte, you could almost call the vacant four-story office structure at East Morehead and Kenilworth Avenue a landmark.

For nearly 15 years, it has been there on the corner – waiting, waiting, waiting for a tenant or perhaps a buyer.

At last, it looks like something is about to happen.

Planet Five Development Group LLC of Jacksonville, Fla., has posted a sign out front announcing plans for medical and general office space.

“We are still in the preliminary stages of design and development, but our plan is to put up a new Class A (considered the newest and finest) office building,” said principal Greg Laubach.

The company expects to file for a rezoning by the end of July that would permit construction of an approximately 120,000-square-foot building.

If the city doesn't approve the request, Laubach said, Planet Five could renovate the existing 42,000-square-foot building or build one roughly the same size on the property.

Over the years, various real estate brokers have listed the 47-year-old structure for lease or sale, and developers have made pitches to no avail.

Most of those who tried cited difficulty in communicating with the out-of-town owner, GMA Industrial Corp.

“We have it locked up,” said Laubach. “It's owned by a family in New York. We have a relationship with them. They thought it was time to move forward.”

He didn't disclose how much the developers are paying for what would be their first project in Charlotte. The county values the building and land at about $1.5 million for tax purposes.

Waiting does have advantages. During the time the owners sat on the property, the office market came to them.

The East Morehead-Kenilworth corner is within walking distance of the Little Sugar Creek Greenway and the Metropolitan retail-residential-office development, and Carolinas Medical Center's office complex has emerged across East Morehead.

“We feel good about the site, and we feel like it will be an attractive alternative to the downtown market,” Laubach said.

The average annual office lease rate in the midtown area, which includes East Morehead, rose to $21.77 a square foot in the first quarter, up $1.39 from a year earlier, according to Karnes Research Co. The uptown average was $25.44 a square foot.

“Metropolitan set a new benchmark for office rents in that area,” and its annual rate, in the $30-a-square-foot range, is pushing rents higher there, said Charlotte real estate analyst Frank Warren of Warren & Associates.

“The economics have changed dramatically over the past couple of years,” he said, making it possible for developers to recoup the cost of incorporating structured parking.

On top of that, East Morehead is becoming a desirable location for offices in the shadow of uptown's towers.

Tenants in East Morehead buildings can enjoy the ambience of Dilworth's trees as they walk to parks, a YMCA, a rail stop and restaurants. And they don't have to pay $100-plus a month to park in an uptown deck.

Among other projects in the works, Insite Properties plans a 12-story office building to replace McEwen Funeral Home's complex at 727 E. Morehead. And Harris Development Group is developing a four-story office/retail building on the former LongHorn Steakhouse site at East Morehead and Euclid Avenue.

The way old buildings are demolished in Charlotte, you could almost call the vacant four-story office structure at East Morehead and Kenilworth Avenue a landmark.

For nearly 15 years, it has been there on the corner – waiting, waiting, waiting for a tenant or perhaps a buyer.

At last, it looks like something is about to happen.

Planet Five Development Group LLC of Jacksonville, Fla., has posted a sign out front announcing plans for medical and general office space.

“We are still in the preliminary stages of design and development, but our plan is to put up a new Class A (considered the newest and finest) office building,” said principal Greg Laubach.

The company expects to file for a rezoning by the end of July that would permit construction of an approximately 120,000-square-foot building.

If the city doesn't approve the request, Laubach said, Planet Five could renovate the existing 42,000-square-foot building or build one roughly the same size on the property.

Over the years, various real estate brokers have listed the 47-year-old structure for lease or sale, and developers have made pitches to no avail.

Most of those who tried cited difficulty in communicating with the out-of-town owner, GMA Industrial Corp.

“We have it locked up,” said Laubach. “It's owned by a family in New York. We have a relationship with them. They thought it was time to move forward.”

He didn't disclose how much the developers are paying for what would be their first project in Charlotte. The county values the building and land at about $1.5 million for tax purposes.

Waiting does have advantages. During the time the owners sat on the property, the office market came to them.

The East Morehead-Kenilworth corner is within walking distance of the Little Sugar Creek Greenway and the Metropolitan retail-residential-office development, and Carolinas Medical Center's office complex has emerged across East Morehead.

“We feel good about the site, and we feel like it will be an attractive alternative to the downtown market,” Laubach said.

The average annual office lease rate in the midtown area, which includes East Morehead, rose to $21.77 a square foot in the first quarter, up $1.39 from a year earlier, according to Karnes Research Co. The uptown average was $25.44 a square foot.

“Metropolitan set a new benchmark for office rents in that area,” and its annual rate, in the $30-a-square-foot range, is pushing rents higher there, said Charlotte real estate analyst Frank Warren of Warren & Associates.

“The economics have changed dramatically over the past couple of years,” he said, making it possible for developers to recoup the cost of incorporating structured parking.

On top of that, East Morehead is becoming a desirable location for offices in the shadow of uptown's towers.

Tenants in East Morehead buildings can enjoy the ambience of Dilworth's trees as they walk to parks, a YMCA, a rail stop and restaurants. And they don't have to pay $100-plus a month to park in an uptown deck.

Among other projects in the works, Insite Properties plans a 12-story office building to replace McEwen Funeral Home's complex at 727 E. Morehead. And Harris Development Group is developing a four-story office/retail building on the former LongHorn Steakhouse site at East Morehead and Euclid Avenue.

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