The Last Mile Is Driving Charlotte Industrial
After turning in a strong 2016 in leasing and development, Charlotte's industrial market entered the year with its momentum intact. The concept of the last mile is an important factor in that strength.
That certainly was the case for Trinity Capital Advisors' recent acquisition of 1001 Bond St., two industrial buildings totaling 404k SF in the northwest submarket of Charlotte. “The last-mile location and proximity to interstates and the center of the city is exactly what we look for, and we’ll continue to invest in similar industrial assets throughout the region,” said Trinity Capital partner Jeff Sheehan.
Both buildings are 100% occupied by Camber Ridge, a tire R&D company. Trinity Capital purchased the asset in a JV with SilverCap Partners, its second partnership with the firm. Trinity Capital owns close to 1M SF of industrial product in the Carolinas, and is developing five single-tenant industrial buildings in southwest Charlotte’s Shopton Ridge Business Park.
A recent report by CBRE on the Charlotte industrial market also noted the last mile as a market driver. "With about 50% of the U.S. population living within a one-day truck drive of Charlotte, industrial space in the market is desirable to large distributors," it noted. "With its growing population of more than two million, the local consumer base has expanded and created a need for last-mile delivery. These two factors make the case for success among both large and small industrial assets in Charlotte."
According to CBRE, Charlotte industrial vacancy has reached a historic low, creating leverage for landlords to negotiate higher leasing rates, especially at Class-A warehouses. The low vacancy also creates demand for new build-to-suit and spec development, with more than 2.5M SF added to the market in 2016 and more on the way in 2017.
Expanding local companies need more industrial space, but even in a relatively tight market like Charlotte, bagging a buyer for a large industrial site is no sure thing for sellers. MPV Properties cited the incentives offered by York County and South Carolina as important factors in the recent plans by OXCO Inc to move its manufacturing HQ to Lakemont Business Park.
The Charlotte-based OXCO, currently in a 79k SF building at 500 Gulf Drive in Charlotte, will relocate to a new 150k SF to 200k SF facility on about 21 acres it is buying in the business park in York County. MPV Properties managing partner Bailey Patrick repped the seller, while Jeff Harper of CCRA, associated with Walters Commercial Real Estate Services, repped the buyer.