Charlotte’s strong economic foundation continues to foster a healthy demand for office pace. Charlotte saw almost 2.0 million square feet (msf) of new office space delivered in 2017 including a total of over 1.0 msf delivered in the CBD. Though Q4 absorption was slightly negative, Charlotte’s 2017 absorption year total is just under Charlotte’s 10-year historical average of 1.3 msf. Citywide vacancy increased to 8.7% from 8.5% year-over-year, due to new building deliveries.
Citywide rental rate growth has continued with 8.1% for 2017. Currently, there is 2.3 msf under construction which will increase inventory by 2.2%. New, high quality buildings should push rental rates higher, especially in the CBD along the Stonewall corridor where Legacy Union and Ally are being developed with delivery in spring of 2019.
Office investment sales activity in 2017 has reached a historic high with over $2.0 billion sold (properties selling for more than $5.0 million each). This amount includes Charlotte’s largest real estate transaction of all time, Ballantyne Corporate Park that sold earlier this spring for a record $1.2 billion ($267 psf). Sales volume should rise in 2018 as occupancy numbers increase and owners monetize their assets.
Check out the infographic below!