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Leasing Momentum

Leasing Momentum
Mark Holoman
Two recent reports on the Charlotte office market have confirmed that leasing is moving, but will it last til next year? C&W Thalhimer reports that leasing surged in Q2 '12 to nearly 1.5M SF, a year-over-year increase of 82%. SVP Mark Holoman tells us that companies need to continue to migrate to Charlotte for the momentum to continue. "If they do," he says, "and there's a lack of new supply coming online, leasing should continue to strengthen." For a couple of years now, he notes, there's been little new supply, and that's why there's been a tightening in the CBD and SouthPark and other submarkets.
Office Moving 2012 MCHAR
Sarah Godwin

A Lincoln Harris report says Charlotte's office market in 2Q saw net absorption down to 44.7k from 91.7k in 1Q12—though as Thalhimer reported, leasing surged in the quarter (1.2M SF by Lincoln Harris? reckoning). Research manager Sarah Godwin tells us that the anemic Q2 absorption is more a function of slow leasing activity at the end of 2011. Still, she says, a fifth straight quarter of positive net absorption is a strong indicator of a slowly improving economy, including organic growth within the market. Of the area's large leases over 13k SF, all were inked by companies that had already established a presence in Charlotte.

Jetton Medical
Major mergers seem to be breaking in Charlotte's favor  as well. Take Duke Energy?s merger with Raleigh-based Progress Energy to form the nation's largest utility. Investor interest in office is up, according to Thalhimer, which notes that new ownership has entered the market via recent sales of the Coliseum Centre, One Wells Fargo Center, and the Fifth Third Center. And it's more than just trophy property sales: recently an unnamed investor paid $10.7M for the 44.8k SF Jetton Medical, a MOB in Cornelius, originally developed in 2007 by Merrifield Patrick Vermillion. (You know things are good when people are checking out the deep cuts.)