Charlotte has low costs of doing business, a growing population and appeal to well-educated millennials – all factors that brokerage firm JLL say put the city in the “high industry opportunity, lower cost” group for tech firms.
But does the city have enough “cool” office space to draw those companies? That’s one factor JLL identified as a possible bottleneck in its assessment of 45 US cities and their respective allure for tech companies, in a report released last week.
“With a renowned reputation as the Southeast hub for financial institutions due to the footprint of Bank of America and Wells Fargo, Charlotte has been slowly and steadily breaking that stereotype through business diversification,” JLL wrote. “A major obstacle that technology groups face in the market is a lack of non-traditional office space. The demand for innovative space is high, and although there is a supply of product that meets the demand, ultimately the demand is outpacing the inventory.”
Although there’s about 2.3 million square feet of office space under development in the Charlotte market, the vast majority of it is upscale office space in traditional structures. Think about 615 South College, 500 East Moreheaqd and 300 South Tryon, uptown towers. There’s much less “nontraditional” space, the kind of quirky, often older offices that attract firms wanting to be seen as creative, hip and funky.
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Some developers think that’s left them an opening. David Furman, for example, is developing 10Tryon, an office building at 10th and North Tryon streets that’s meant to be less “corporate.”
“The idea of the design is to create a modest-scaled building for downtown,” Furman said last month. “It’s a funky design. It’s not corporate.”
JLL, a major office brokerage firm, said it expects tech companies to look for space in South End.
“Technology groups who want to recruit and retain top workforce talent will look to South End as an office destination due to the area’s innovative inventory and parking ratios,” JLL wrote.
Even if Charlotte doesn’t have as much funky office space as tech firms might like, the city’s lower costs make it attractive. JLL ranks Charlotte alongside cities like Minneapolis, Raleigh/Durham, Atlanta and Nashville as places with low costs and good opportunities for tech firms to attract talent and investment. That puts Charlotte ahead of cities such as Cleveland, Detroit and St. Louis, with both low costs and low opportunities.
And while San Francisco, Boston and Seattle have higher opportunities, they also come with much higher costs for companies and employees.