Trinity Capital unveiled plans Thursday for a 14-story office tower at Morehead and South Tryon streets, the latest sign of confidence in uptown’s rebounding commercial real estate market.
The tower, to be called 1000 South Tryon Street, will feature 300,000 square feet of office space and clear views of the uptown skyline. It will also have ground-level retail stores and a 900-space parking garage whose Morehead Street facade will look like an apartment building.
Trinity Capital founding partner Gary Chesson said the time is right for a new office tower, citing growing economic momentum in South End and the central business district. “We’re confident that this will be a very successful office development,” he said in a statement.
Construction won’t start until the project secures an anchor tenant. Once that happens, Chesson said the development will break ground with a 15-month construction schedule.
Several small businesses operate in the small buildings currently on the site. Trinity officials said those businesses won’t have to move until after an anchor tenant is named.
Not far from Chesson’s project, several other office towers have been announced this year:
• Just down Tryon, Crescent Communities is also seeking an anchor tenant for its planned 27-storyTryon Place
mixed-use tower at Stonewall Street, where a Goodyear auto service center now stands.
• Portman Holdings, the Atlanta-based company that built the Westin hotel in 2003, also needs an anchor for the 15-storyoffice tower
it wants to build on top of the Westin’s parking deck at South College and Stonewall streets.
• Groundbreaking is slated for this fall on a 25-storyoffice tower
Spectrum Properties and Cornerstone Real Estate Advisers are building at Tryon and Third streets. That timetable would make it the first tower to start construction in uptown since the end of the recession. Babson Capital Management will be the anchor tenant for the 634,000-square-foot building, to be called 300 South Tryon.
Trinity officials said their tower’s location just outside of uptown lets them offer more parking and easier access than many locations in uptown proper.
“We’re offering something a little bit different,” said Sherrie Chaffin, Trinity’s director of development. “So while we might be in competition for tenants … we might be an option for tenants that don’t look at those true central business district properties.”
Center City Partners CEO Michael Smith contends the city’s central business district must expand its supply of office space or risk missing out on corporate job expansions and relocations. He called the Morehead tower “a distinct alternative” that could help attract young workers and alleviate pent-up demand for space.
Since the late 1980s, uptown has traditionally added more than 400,000 square feet of new office space each year, while companies absorbed a bit less than that, said Andrew Jenkins, managing partner in the Karnes research firm’s Charlotte office.
But since 2010, no new office space has been built uptown.
“So one could argue that we are due for some new supply,” Jenkins said.
The office vacancy rate in the midtown district, which includes the Morehead site, stood at 7.5 percent in the second quarter, the lowest in the city, according to the Karnes research firm. The rate for Class A office space, the industry’s highest grade, was just 4 percent.
Development activity has been picking up in that area recently. Morehead Street has seen a recent multifamily-residential building boom, including four projects stretching from Carolinas Medical Center to near Bank of America Stadium.
Across Tryon from Trinity’s site, the 3-acre property housing the Uptown Cabaret and the Midnight Diner is on the market for $20 million. Officials have said the site could be sold as one piece or split into multiple parcels.
For its tower project, Trinity will partner with Honey Enterprises, which owns the site’s nearly 2 acres.
“It took many years for us to assemble the property,” said Yates Honey, president of Honey Enterprises, “and it also took the foresight of Trinity to realize the value of such a strategic location.”