Office Demand Up, Supply Isn't

Cassidy Turley granted Bisnow an exclusive peak at its Q1 13 market reports for Charlotte. Our summary: Even though it's spring, don't throw away your snow shovels. There may be a few groundbreakings.

Cassidy Turley SVP David Dorsch tells us that Charlotte has seen a steady increase in office demand since the economy turned around--albeit weakly--in the summer of 2010. That trend continues, but its harder to find large blocks (100k-plus SF). Watch the video to see what David sees for greater Charlotte in 2014.

Several large corporate expansions--most notably SPX, Belk, United Technologies and Wells Fargo--led this quarters positive net absorption of 327k SF. Bank requirements (big and small) were a positive force this quarter, especially with Wells Fargos expansion into Innovation Park. Several other banks, trying to improve their Charlotte presence, also made significant progress (PNC, UBS, Certus Bank). Rents: Class-A is up year-over-year, but Class-B rates are still slipping and dragging down the market rental rate average.

On the industrial side, there was a substantial burst of leasing. Vacancy is now at 7.3% for warehouse product. Two new spec buildings broke groundone in Monroe and another in Concordwhich may spur some developers to jump-start their own spec projects. Landlords are offering aggressive terms to current tenants to entice them to stay, which usually proves successful.

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