Signaling a continuing shift in Charlotte’s office market, LendingTree is moving its corporate headquarters from Ballantyne to South End, real estate firm The Spectrum Companies announced Tuesday.
The financial tech company will occupy 175,000 square feet in one of two 11-story towers Spectrum is building on South Tryon Street at Carson Boulevard. The project will also feature a courtyard, retail, restaurants a 200-room boutique hotel.
LendingTree is the latest company looking to relocate near amenities like public transportation to attract workers in a competitive environment.
LendingTree is an online service that lets consumers comparison-shop for a range of financial products, such as mortgages, personal loans and credit cards. CEO Doug Lebda launched the company in Charlotte in 1996.
In a press release, Lebda said South End’s proximity to financial services firms in uptown played a role in the move. He also cited South End’s amenities, like the light rail and proximity to the highway.
The company said it employs around 500 in the Charlotte metro area. It plans to move in late 2020.
In December, LendingTree announced plans to nearly double its Charlotte-area footprint after receiving state incentives in exchange for keeping its headquarters in Charlotte.
In that announcement, the company said it will add 436 jobs paying an average wage of more than $100,000 over the next five years, in exchange for an incentives package that included $8.37 million in state inducements.
At the time, Lebda said the firm considered more than 20 locations in several states, which he did not name. He said the new jobs will include positions in engineering, finance and data analytics.
South End boomed with the opening of the light rail around a decade ago, adding apartments, breweries and restaurants in what was once mostly warehouses. But it evolved largely as a residential and entertainment district, not a hotspot for major corporations.
That’s shifting, Spectrum Chief Operating Officer Steve McClure said.
“Finding the best talent and retaining them is one of the toughest things company owners and leaders have to do,” McClure said. “They’re really choosing where to locate their office space to help with that.”
Nearby, Texas-based Dimensional Fund Advisors recently opened its East Coast headquarters on the former Common Market Site at 1515 South Tryon St. The company received $18 million worth of local and state incentives, the Observer reported when the expansion was announced in 2015.
When Dimensional Fund Advisors landed on South End for its building, that changed the landscape, said Kenny Smith, a commercial real estate broker and former City Council member.
“The sub-market of South End was completely reset,” he said.
According to a report from real estate services firm JLL, just under 600,000 square feet of office space is under development in South End and midtown. That’s still dwarfed by uptown’s more than 2 million square feet, but South End is becoming a formidable force as the city looks to attract companies.
“(South End) has really transformed from more of a boutique smaller office user ... to now a real legitimized location and destination for corporate users,” said Mark Holoman, managing director for the Charlotte market at Cousins Properties, which is developing the Dimensional Fund Advisors building.
At South Tryon and Bland streets, the RailYard development is underway, a pair of buildings that will have almost 300,000 square feet of office space, along with ground floor shops and restaurants. Professional services firm Ernst and Young has said it will bring hundreds of employees to the site as part of an innovation and technology center.
“It’s that mix of walkability, bikeablility, transit orientation, the rail trail, the amount of quality living,” said Center City Partners CEO Michael Smith. “These are the attributes that the modern workforce is looking for.”
And it’s not cheap for employers looking to relocate: South End’s average office rent of around $34 per square foot is on par with rents in uptown, the JLL report found.
“It wasn’t that long ago you could lease space in South End in the upper teens per square foot,” said Barry Fabyan, managing director of agency leasing at JLL. “And that didn’t support refurbishing the mills. That didn’t support new construction. But ... the demand kept coming as more people kept relocating there.”
Changing suburban markets
LendingTree’s move to South End also signals another trend: as companies compete for workers in a tight job market, where they’re located plays a big role.
“We want to be centrally located to everybody in Charlotte,” Lebda said in an interview with the Observer.
The firm has been in the Ballantyne Corporate Park since 2000.
Victoria Nwasike, chairwoman of the Board of Directors of South Charlotte Partners, said the Ballantyne area needs more amenities to compete for younger workers. That includes access to the light rail and walkability, she said.
“We have to start looking towards the future and to see what future generations want,” she said. “If we don’t start advocating for them now it’s not going to happen.”
Nearby Pineville originally said no to the Blue Line, citing concerns about traffic, dense development and an influx of people. But now, the town is on board, and the Charlotte Area Transit System is studying a Pineville-Ballantyne light rail extension.
LendingTree’s initial plan was to move to SouthPark, but Lebda said the headcount grew too large for the space they had purchased. County records show an affiliate of the company bought two buildings on Rexford Road in December 2016 for just under $25 million. Lebda said the buildings are now on the market.
Still, Smith, the broker, said the suburban markets are appealing for companies looking for cheaper rent and that don’t have as young of a workforce.
“If you’re a back office operation, and you don’t necessarily have huge interface with potential clients, the suburbs probably still make sense,” he said.