South End sees flurry of new tower development. What will be built in the neighborhood?
Take a walk through the heart of South End and you’ll see crews clearing land for 110 East, a 23-story office tower planned for 2024.
Around the corner on South Boulevard, another developer is planning two more 24-story towers, one for offices, the other for apartments.
Walk up Camden Road and developers are planning a 30-story luxury apartment tower at the site of the iconic Price’s Chicken Coop, which recently closed.
More office and residential space is planned further up, on the edge of uptown, including a $750 million development that will bring three more high-rise towers with close to 1 million square feet of office space and hundreds of apartments.
The flurry of high-rise development is the latest chapter for booming South End, long known for its low-rise warehouses and residential buildings just outside the shadow of uptown’s skyscrapers. But the news comes as little surprise to those who have been watching the neighborhood develop along the light rail, first with residential and, later, with office space.
“Offices need purpose,” said James LaBar, senior vice president of economic development with Charlotte Center City Partners, which promotes the area around uptown and South End.
LaBar was standing outside The Railyard, a mixed-use development off South Tryon Street. The development recently held the per-square-foot sales price record in Charlotte.
That was until the sale late last year of the 23-story Lowe’s Design Center, also in South End, which sold for $318 million, or $889 per square foot.
Companies and employees, LaBar said, are seeking more than just a place to come in for work, especially in the new environment of flexible work schedules during the coronavirus pandemic. Businesses want a place where their employees can live and have things to do nearby, like restaurants, bars and other community events.
Filling in the South End property gaps
In 2016, Austin, Texas-based investment firm Dimensional Fund Advisors announced plans to open its East Coast headquarters in Charlotte.
Its 250,000 square foot office at Camden and South Tryon streets, which displaced a Common Market location, was a “milestone,” LaBar said, because it was among the first companies to open office space in South End.
Lowe’s tech center and others have followed in its footsteps, helping to signal a new future for South End.
The nearby 110 East project is under construction and will feature 370,000 square feet of office, retail and restaurant space.
Closer to uptown, Chicago-based Riverside Investment and Development is planning 800,000 square feet of office space and between 350 and 650 apartments.
The project could transform the surrounding streetscape, making it more pedestrian-friendly and offering a better connection between South End and uptown.
“It fills in a pretty big gap,” LaBar said.
Doubling down on office space
At roughly 2 square miles, South End is what’s known as a submarket.
It means a neighborhood near a larger city in which the office market has some common similarities, said Chuck McShane, director of market analytics for the Carolinas for CoStar Group, a real estate research firm.
In the past five years, South End and only one other submarket in the country doubled the amount of top-tier office inventory, according to CoStar.
The other neighborhood, Fulton Market in Chicago, had striking similarities to South End: another smaller community located outside the busy urban core with a number of historic, older buildings.
In 2017, South End had 1.5 million square feet of 4- and 5-star office inventory, according to CoStar. That number jumped to just over 4 million square feet this year. Total office inventory in South End grew too, by nearly 39%.
It’s a shift away from people following the offices to places like uptown to office buildings, or corporations, following the people to neighborhoods like South End, McShane said. In uptown, offices have been built to suit for a particular company.
In South End, the majority of office buildings are speculative in nature, meaning they were developed without a committed tenant or company in mind. In uptown, it’s another story: of the office buildings delivered last year or are under construction today, 92% are leased, McShane said. In South End, 52% of building delivered last year or are under construction are currently leased.
It still helps to have a central office location even in a world where companies are still navigating remote work and flexible schedules, McShane said.
“You can pull from a much wider labor pool that way,” McShane said.
Mix of uses: commercial and residential
White Point Partners is behind two of the towers coming to South End.
The Charlotte-based group, which started in 2014 investing in multifamily projects around the Southeast, plans to build a 24-story office tower at 1728 South Boulevard. Right next door, the group is planning a similar-sized apartment tower. Both will have ground-floor retail.
White Point chose the location because of the proximity to light rail and the other amenities around South End, co-founders Jay Levell and Erik Johnson said.
It will also be a good mix of uses, Levell said. He views the office space as a good daytime use and then having people being able to live nearby and have things to do at night.
“You can choose from more options than anywhere in the city,” Levell said.
