Record Sale Propels Charlotte Office Market
- CBD saw a strong opening in 2017 in leasing and sales with some of the most notable transactions being WeWork and BDO leasing 51,546 square feet and 25,837 square feet respectively; both in 615 South College.
- Charlotte's overall vacancy rate of 10.5% increased from Q4 2016 as new supply continues to come online.
- New Class A delivery continues to push average rental rates higher as construction costs continue to rise.
- Expect vacancy to rise as 1,787,613 square feet of new construction is expected to deliver over the next few quarters. However, with pent up Tenant demand, absorption is expected to keep pace with added supply.
Q1 2017 Charlotte Office Market Summary
The Charlotte market had a robust start with supply and demand remaining fluid throughout the 1st Quarter. Development will continue to stay active with several developments projected to break ground in South End, University and Airport submarkets over the next three-four quarters. In addition to strong leasing activity, Charlotte saw the city's largest investment sale to date with Northwood Ravin's acquisition of Ballantyne Corporate Park. Bissell Companies sold over four million square feet of Class A office, four hotels totaling 588 rooms, the Ballantyne Golf Club and undeveloped land for approximately $1.2 Billion. Expect to see sales and leasing activity continue to be strong through the next few quarters, especially in suburban submarkets, given strong tenant demand and low vacancy.