New apartments get all the buzz, but Charlotte’s also seeing a wave of new office construction – the biggest since the recession.
About 2.3 million square feet of office space are under development in the Charlotte region, according to real estate brokerage firm JLL.
So how much is that? Almost enough to equal the office space in Charlotte’s two tallest buildings: the 1.1 million-square-foot Bank of America Corporate Center and the 1.3 million-square-foot Duke Energy Center.
The new offices are rising both in uptown and in the surrounding areas, and they include structures built on a speculative basis, with no tenants lined up, as well as build-to-suit projects for specific companies.
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“The Charlotte market has seen unprecedented construction growth since the recession in 2008,” JLL wrote in its third quarter Charlotte office summary. The market’s fundamentals appear strong too, with vacancy down to 10.7 percent (from a high of 17.9 percent in 2010), and average asking rent hitting $24.12 per square foot, up from $22.67 a year ago.
$24.12Average office asking rate per square foot in the Charlotte market, third quarter 2016
$20.46Average office asking rate per square foot in the Charlotte market, 2014
Here’s a look at some of the biggest office projects underway, along with leasing activity so far:
▪ 300 South Tryon: The 25-story office tower at Tryon and Third streets is set to open in summer 2017, with anchor tenant Barings, a financial firm, occupying the top nine floors. Maxwell Hanks of developer Spectrum Properties said about 370,000 square feet remain to lease, and that he’s in talks with potential tenants.
▪ 615 South College: A few blocks away, an 18-story office tower is taking shape next to the Westin hotel. The building is topped out, and is on track to open in the spring. Developer Portman Holdings recently inked a first tenant in the speculative tower: Regions Bank is leasing nearly 64,000 square feet on the fourth, fifth and sixth floors, and will have a retail branch on the first level. About 308,000 square feet remain to lease in the building, including the top floors.
▪ 500 East Morehead: Just outside of uptown, Beacon Partners’ seven-story office building is also set to open next year. Tenants so far include Elliot Davis Decosimo, CB&I and two restaurants. There’s still 7,500 square feet of retail and two floors of office space totaling 43,000 square feet for lease.
▪ Brigham building: In Ballantyne, developer Bissell scored big last month when Wells Fargo leased the entire 10-story Brigham building. It’s set for completion this month, and the first of up to 1,600 Wells Fargo employees are set to move in early next year. The 287,500 square-foot building was built on a speculative basis.
▪ Capitol Towers: In SouthPark, the dual domes of the Capitol Towers, a pair of 10-story office buildings by developer Lincoln Harris on Congress Street, are nearing completion. The first building is open and the second is scheduled to open in the first quarter of 2017. Together, they’ll total 480,000 square feet of office space. Leases announced so far include Albemarle Corp. (47,000 square feet) and Robert W. Baird & Co. (12,435 square feet).
▪ LPL Financial: In Fort Mill, LPL financial is putting the finishing touches on its new headquarters building. The company is holding a grand opening for the campus Nov. 30. The headquarters totals 450,000 square feet, split between two buildings, and will accommodate up to 3,000 workers.
▪ Sealed Air: In LakePointe Corporate Center, near Charlotte Douglas International Airport, the company that makes Bubble Wrap (and a large range of other products), is finishing up its headquarters. Sealed Air should move in by the end of the year to its 300,000 square foot facility, which it will share with the spun-off Diversey division.
▪ Dimensional Fund Advisors: This building project is further out – financial firm Dimensional Fund Advisors doesn’t expect to complete its new headquarters in South End until the fourth quarter of 2018. It’s a high-profile location, where Common Market South End and several other local retailers were based, and developer Cousins Properties recently started demolition of the existing structures at Tryon Street and Camden Road.
▪ Tryon Place: At Stonewall and Tryon streets uptown, developer Crescent Communities recently tore down the existing Goodyear building and plans to build Tryon Place, a mixed-use development centered around a new office tower. Site and utility work is expected to begin in January and the building is targeting a 2019 completion. The building is expected to have more than 700,000 square feet of office space. No tenants have been announced yet.
▪ Lincoln Harris, former Charlotte Observer site: Across the street, on the opposite corner of Stonewall and Tryon, developer Lincoln Harris has finished tearing down the former Observer building and is clearing the site. Preliminary plans show Lincoln Harris, along with partner Goldman Sachs, is planning at least 1 million square feet of new office space at that location, though the companies haven’t announced details or a timeline yet.