As Tier 1 markets have become ultra-competitive, with cap rates below 5% in places like LA and Dallas, Charlotte's an attractive alternative for investors chasing better yield. Cushman & Wakefield | Thalhimer SVP Eric Ridlehoover tells us why.
1. A Burgeoning Population
Charlotte's a rapidly growing population hub, Eric notes. A recent report by the Urban Institute projects 47% growth between 2010 and '30. That growth will increase the size of the labor force, which is why repositioning a former John Deere R&D facility here makes a lot of sense. Recently Eric (right) and colleagues Fermin Deoca (left) and Lane Holbert brokered the sale of the 116k SF building at 14401 Carowinds Blvd.
2. The Growth of E-Commerce
With the increasing swell of e-commerce, consumers are fueling industrial growth more than ever, and Charlotte's continuing to benefit. Amazon’s new 222k SF distribution center in Concord underscores how impactful e-commerce is to the industrial sector, and investors are going to follow such strong growth trends. SilverCap Partners, the buyer of the former Deere building (pictured), plans to market the property as a call center, according to Eric.
3. Low Costs of Doing Business
Other market strengths like relatively low entry costs for new construction coupled with Charlotte’s sub-5% industrial vacancy rate will further bolster investment activity, Eric says. "Charlotte, while still considered a second-tier market, is quickly advancing to the very top of the category."
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