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Charlotte CRE May Slow Down, But Will ‘Snap Back Like A Coiled Spring’


The Sun Belt has quickly become one of the country’s hottest regions for commercial real estate, and in North Carolina’s largest city, Charlotte, business is thriving.

Due to the city’s rapidly growing job market and steep increase in population, Charlotte CRE is among the most active markets in the nation — with CBRE ranking the city as the seventh-most-preferred market for investors this year. In 2022, retail saw a record-low vacancy of 3.6%, office space experienced strong Class-A leasing activity and multifamily rent grew at a rate of 10.2%. 

However, like most markets in today’s CRE climate, Charlotte is not immune to unfavorable economic conditions that have made it more difficult to get deals across the finish line, including rising interest rates, tighter capital lending and elevated construction costs. 

But according to Ryan Carver, managing director of multifamily at Charlotte-based architecture and design firm SGA|NW, a GF design company, Charlotte’s CRE market is poised for success despite any short-term uncertainty.

“With inflation leveling off and construction costs stabilizing, we're still seeing people that are bullish in private development,” Carver said. “In 2024, we may see a slowdown in deal flow if a recession hits, but in 2025, we anticipate the market to bounce back greater than before.”

Bisnow spoke with Carver about the trends the sector is seeing, how economic conditions have impacted deal flow and how the firm structures its deals to keep business moving forward.

Bisnow: What development trends has SGA|NW, a GF design company, noticed in Charlotte this year? Are these trends indicative of a greater development pattern throughout the country?

Carver: The big markets that we're seeing right now in the nation are the Sun Belt states, especially the Carolinas, Florida and Texas. In these states, we’ve got a lot of people coming in from the Northeast and West Coast. These markets are expanding primarily due to an increase in manufacturing and technology jobs. We're starting to see a greater life sciences presence, whether that's medical equipment manufacturers or biotech firms. These are what I would consider to be not only hot markets, but they’re more insulated than some of the other markets in the country.

At SGA|NW, a GF design company, there is a focus on private development. This encompasses multifamily, mixed-use, restaurants, retail and office. In the current market, office space is only going to be successful under particular circumstances. Banks are more tentative about these deals, too. Even when the banks want to lend, regulators are capping them. However, mixed-use and multifamily are doing very well. Next year, the market may go through a slump if we hit a recession. In 2025, I think the market will snap back like a coiled spring. 

Bisnow: How have the tightening capital markets impacted deal flow in Charlotte? What other economic factors have impacted the Charlotte CRE market this year?

Carver: The increase in interest rates over the past year has caused people to become tentative. It doesn't mean things aren't moving, it just means quality over quantity. For the deals that are going on right now, for the most part, the capital has already been committed. 

The market is tough because it's not about where it is now, it's about where the markets are going to be. Deal structuring is taking longer, the way that developers are analyzing deals is different and increased risk has changed loan-to-value structures. Developers need more equity in the deal. This has adjusted the way lenders and developers are evaluating risk versus reward. To meet the current market conditions, at the firm we initiate value engineering at the earliest stages of design development, ultimately bringing value to the bottom line.

Developers still want to be in Charlotte, but some are finding that all of the “good” or “easy” sites to build are gone. We've gotten really creative and immersed in these deals to assist in moving them forward. In the last 18 months, we’ve only had one deal stall, and it's back on the board again. 

Bisnow: How has the firm creatively structured deals to keep moving forward?

Carver: I’ve been focused on private development/architecture for more than 20 years now, and one of the most important parts of the job is understanding what these deals look like, how they get delivered, being fiscally responsible, understanding the difference between cost and value and knowing how to design according to market performance and trends.

We view our firm as an extension of our client. As part of this professional partnership, we bring the general contractor in early, get real-time market cost feedback and understand that it’s in everyone's best interest to stay agile and flexible.

Bisnow: What’s next for SGA|NW, a GF design company? And what does the firm think the Charlotte market/economy will look like over the next few years?

Carver: We're about a year past where the yield curve inverted, so we could potentially be facing a recession in the coming months. I think in 2024 there is going to be a slowdown. When developers are looking to target a delivery, it's typically in 2025. Developers shouldn’t, and aren’t, taking their foot off the gas. 

I think we will start to see developers looking at different products that maybe we haven't seen before. Returning to office will eventually happen, as well as a return to bigger metropolitan areas. The public is reacting strongly to interest rate hikes, and this has a strong bearing on the market. Everything is interconnected.

At SGA|NW, a GF design company, we're going to continue to grow and are slated to take our multifamily expertise national rather than having just regional focus in the next five years. Though there's some uncertainty in the short term, I'm optimistic about the mid- to long-term outlook in Charlotte as well as nationally.

For further inquiries or to learn more about SGA|NW, a GF design company’s multifamily design services, please contact Ryan Carver, managing director of multifamily at SGA|NW, a GF design company, at or Danielle Barr, senior marketing manager at GF, at

This article was produced in collaboration between SGA|NW, a GF design company and Studio B. Bisnow news staff was not involved in the production of this content.

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