Development

More than a million square feet of new office space is opening soon uptown

The 25th floor of the 300 South Tryon office tower, under construction.
The 25th floor of the 300 South Tryon office tower, under construction. dlaird@charlotteobserver.com

It’s been years since uptown got a new office tower, but the next year will see more than 1.2 million square feet of new office space hit the market, according to the third quarter office market snapshot from Cushman & Wakefield.

That’s because several new office projects are nearing completion. The biggest is 300 South Tryon, a 25-story, 638,000 square-foot tower that’s expected to welcome its first tenants in July. The building is about 40 percent pre-leased, mostly by anchor tenant Barings.

Here’s a quick look at some of the factors shaping the uptown office market, and some of the new buildings coming online:

▪ The other large office tower set to open in 2017 is 615 South College, a 19-story, 381,000 square foot building that’s 18 percent pre-leased.

▪ The average asking rental rate for office space in uptown was $28.92 per square foot in the third quarter, up $1.09 since the end of 2015. That’s higher than the average $24.86 per square foot asking rate for class A space in suburban markets.

▪ Bank of America is clearing tenants out of its main office tower uptown at Bank of America Corporate Center. My colleague Rick Rothacker reported on these plans earlier this month. Cushman & Wakefield said the process will clear 14 floors of the 60-floor tower, and the process will take about two years to complete, as Bank of America consolidates more employees in buildings it owns. That could drive more tenants into the new office towers under construction.

▪ Including uptown, the rest of Charlotte and surrounding counties, a total of 3.1 million square feet of new office space is set to be completed in 2017, Cushman & Wakefield said. About 2.2 million square feet of that has already been leased, including “build-to-suit” projects for specific tenants.

▪ ”Net absorption in 2016 will fall short of historical averages but will edge down vacancy in suburban markets,” wrote Cushman & Wakefield. “With new ‘spec’ supply coming on line in the urban core markets, vacancy rates could stay flat into early 2017.”

Ely Portillo: 704-358-5041, @ESPortillo

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