Market Reports

Charlotte’s Industrial Market Expected to Close Another Robust Year of Leasing

by John Nelson August 30, 2021

The Charlotte industrial market is seeing significant tenant demand and investment activity at mid-year 2021 as the market begins to return to normalcy after the disruption during the early days of the pandemic. Like many other Southeastern industrial markets, Charlotte saw a lag in activity through the second and third quarters of 2020. One year later, the impacts of the pandemic continue to burn off, creating an almost insatiable appetite for modern warehouse and distribution space. Since the start of the year, the market has seen a strong increase in overall activity as local economies continue to open up, employment levels rebound and businesses move forward with decisions about space utilization. Tenants in the e-commerce, consumer goods, retail and light manufacturing sectors are particularly active. While the market finished 2020 with nearly 5.3 million square feet of net absorption, a figure that outpaced 2019’s total of 2.7 million square feet and was on par with the nearly 5.4 million square feet absorbed in 2018, 2021 is expected to reach a net absorption for the calendar year that is equal or greater than 2020. Many tenants expanding in or entering the market are taking mid- to large blocks of space, a …

August 30, 2021

Data Centers Industrial Life Sciences Market Reports North Carolina Southeast Southeast Market Reports

Life Sciences Firms Dominate Activity in Raleigh-Durham’s Industrial Market

by John Nelson August 23, 2021

It seems as though we have recently seen significant weekly announcements about investment and job creation by major U.S. companies into the Research Triangle Park region, the area situated between the cities of Raleigh and Durham. For instance, tech titans Apple and Google declared plans to establish major engineering hubs in the region, adding heat to an already dynamic market. It is common knowledge that the Triangle area is respected for its large, highly educated workforce thanks to top-ranking colleges and universities, including Duke University, North Carolina State University and University of North Carolina at Chapel Hill. Wake Tech, North Carolina’s largest community college, also serves as a vital engine, providing the region’s workforce with STEM candidates. These institutions supply existing and expanding businesses with an impressive talent pool. Theses factors, along with a business-friendly economic climate, have grown the Research Triangle into one of the nation’s largest research centers. Although local headlines continue to buzz with real estate business news, the Raleigh-Durham industrial market has witnessed steady real estate investments from life sciences and R&D businesses for decades. Over the past 24 months, however, demand for life sciences space has had a dramatic impact on traditional flex/light industrial users …

August 23, 2021

Market Reports Multifamily North Carolina Southeast Southeast Market Reports

Charlotte’s South End Remains ‘Go-To’ Submarket for Young Renters

by John Nelson August 16, 2021

Charlotte’s South End district has firmly established itself as one of the most dynamic millennial urban submarkets in the Sun Belt. It is increasingly on par with the most thriving areas in other growth cities such as Atlanta, Austin and Nashville and is becoming a 24-hour neighborhood with dining, nightlife and high-end jobs. Charlotte is one of the few cities in the region that has both a true city center as well as a relevant mass transit system. The city’s LYNX Blue Line, which runs from Interstate 485 to the University of North Carolina at Charlotte’s main campus, has proven to be very meaningful for the local multifamily market. LYNX was the catalyst driving South End’s emergence and gives the neighborhood its own heartbeat as renters can commute to Uptown for work or UNC Charlotte for class. Developers are taking note with several apartment projects and mixed-use developments underway in the area, including Broadstone Queen City and Haven South End. As South End has grown into a more dynamic district, Charlotte is becoming an even more attractive destination for recent college grads who are looking to work in the city’s established financial sector, as well as for firms like Lending …

August 16, 2021

Market Reports North Carolina Office Southeast Southeast Market Reports

A City on the Rise: Charlotte Office Market Poised for Growth and Recovery

by John Nelson August 9, 2021

Last year posed many challenges for Charlotte’s office market, as companies continued to delay making decisions about their office space needs. In the fourth quarter, leasing velocity had slowed, with limited deal activity driven largely by lease expirations. But the city still scored several corporate relocations and expansions, faring well compared to other major cities throughout the country. Fast-forward to June 2021, and the light at the end of the tunnel is getting brighter as more occupants set re-entry plans for this fall. This is a transformative year for Charlotte. Commercial Café ranked the Queen City as No. 5 in the United States for the most anticipated office deliveries in 2021 with more than 4.1 million square feet delivering in the metro area this year. Uptown added to its skyline with the addition of 366,000 square feet at Legacy Union Two, the completion of the 742,000-square-foot Ally Charlotte Center, Honeywell’s 330,000-square-foot corporate headquarters delivering later this fall and the 156,415-square-foot FNB Tower delivering this summer. At the end of the first quarter, new construction in Uptown was more than 82 percent preleased. And as more tenants seek out highly amenitized and efficient space, new construction is expected to be the …

August 9, 2021

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Triangle’s Apartment Demand Pushes to the Region’s Suburban Markets

by John Nelson March 8, 2021

The impacts of COVID-19 on the U.S. multifamily market vary significantly across metro areas. Not surprisingly, the nation’s denser gateway markets have been hardest hit, while secondary and tertiary markets have fared better. In a reversal of pre-pandemic trends, suburban locations have gained favor over urban submarkets from both renters and investors. As many employees continue to work from home, larger and more affordable units in suburban submarkets have become more appealing. Elevated construction costs are also a factor, driving garden-style development versus more costly podium construction. The Triangle’s suburban submarkets are experiencing the strongest construction activity, most notably in the North Cary/Morrisville submarket, where 1,784 units averaging over 1,000 square feet per unit are currently underway. As ongoing work-from-home arrangements prompt more tenants to consider living further from the Triangle’s primary employment centers, developers are increasingly willing to look at sites in outlying communities such as Wendell and Clayton. Demand is expected to return to the Triangle’s urban submarkets as employees return to the office and retailers and restaurants fully reopen, but the recovery in these areas is likely to be protracted. Solid footing The Triangle’s multifamily sector ended 2020 on relatively firm footing despite a tumultuous year. Both …

March 8, 2021

Market Reports North Carolina Restaurant Retail Southeast Southeast Market Reports

Raleigh-Durham Retail Bolstered By Grocery Growth, Offsetting Store Closures

by John Nelson March 1, 2021

This time last year, we were commenting on the changing retail market, but we were overall very optimistic about 2020. What a difference a year makes! Across the United States, 2020 brought us the closing of the following: 279 SteinMart stores; 1,100 Ann Taylor stores; 950 Pier 1 Imports stores; 350 Gap stores; 248 GNC stores; 145 A.C. Moore stores; 230 Tuesday Morning stores; and 178 Forever 21 stores. Additionally, Macy’s closed 29 stores in 2020 and expects to close another 45 in 2021. This trend of retail store closings will slow down in 2021, but it will not change. On the positive side, retailers such as Walmart, Target, The Home Depot, Lowe’s Home Improvement and Walgreens have seen positive sales numbers and continue to expand. In the supermarket sector, Kroger, Food Lion and Publix have had record numbers and, along with Aldi and Lidl, are expanding. In the Raleigh-Durham market, our 2020 vacancy rate has increased to 8.24 percent and rental rates have hovered in the $18 to $20 per square foot range, but those numbers are skewed due to rent concessions and abatements. Raleigh-Durham has approximately 86.6 million square feet of retail space with around 640,000 square feet …

March 1, 2021

Life Sciences Market Reports North Carolina Office Southeast Southeast Market Reports

Raleigh-Durham Office Market Remains Stable, Life Sciences Actively Leasing Space

by John Nelson February 22, 2021

The Raleigh-Durham commercial real estate market continues to be one of growth and perseverance despite the global pandemic. Its economy is rich with an array of industries, healthcare and university systems that support population growth and expansion. Commercial real estate is experiencing its own challenges and opportunities through this pandemic, including one of the most talked about asset classes, office. The sector is the subject of the big “pause” discussion as there’s uncertainty going forward. Despite the lack of commitment to many significant leases, the office market’s fundamentals have remained stable in Raleigh-Durham. Rates are holding steady with an average Class A rental rate of $29.59 per square foot. Vacancy and absorption are maintaining competitive levels, allowing market rates to hold somewhat steady. Over the last year, activity reflected these trends as many landlords negotiated short-term renewals without rate increases. If the leasing trend continues this year, renewals and space consolidation will possibly lead to a reduction in rental rates. One of the key driving forces of office product in Raleigh-Durham stems from the life sciences industry. The market is currently ranked No. 5 among life sciences markets in the United States, according to CBRE’s annual report. The life sciences …

February 22, 2021

Market Reports Mixed-Use North Carolina Office Southeast Southeast Market Reports

Northwood Office is Adapting and Expanding 535-Acre Ballantyne Office Campus for a Post-COVID-19 World

by John Nelson July 13, 2020

As one of the largest owners and operators of office space in the Charlotte market, Northwood Office is focusing on what office users want — safety, quality, productivity, flexibility and a sense of community. The firm’s largest asset is Ballantyne, a 535-acre campus featuring 4.4 million square feet of Class A office space situated in the heart of a 2,000-acre community. Ballantyne is home to 17,000 employees and 300 companies. While the COVID-19 pandemic has shifted the landscape for office space, Ballantyne is well-positioned to deliver what employers need in the current environment. “The benefit of working close to home is more appealing than ever, and Ballantyne’s location near the Carolinas border and public transportation options make it accessible for everyone,” says John Barton, president of Northwood Office. “However, Ballantyne’s hallmark is its abundant open space. Always our differentiator, its value takes on a whole new level in a post-pandemic world.” Northwood Office’s priority is the safety and well-being of its customers and team members while also maintaining its buildings at the highest level. The company assembled a task force to prepare and adapt for a phased re-entry to office buildings. New operational procedures underway include ample signage instituting social …

July 13, 2020

Market Reports North Carolina Retail Southeast Southeast Market Reports

Pain Felt in Charlotte Retail Sector, But Phased Reopenings Give Market Hope

by John Nelson July 6, 2020

The COVID-19 outbreak had a tremendous impact on retail across the country, and Charlotte was no exception. As stores were forced to close, business owners had to devise creative ways to operate during the pandemic. Rent deferral, Paycheck Protection Program funds, layoffs and furloughs were some of the ways owners addressed cash flow. Many restaurants faced questions regarding takeout, delivery service, menu adjustments, table spacing and employee safety. Enhanced cleaning procedures, payment procedures, marketing adjustments and general overall operations were other issues facing many restaurants and retailers. Restaurants with drive-thrus and takeout, as well as ones capable of adding “COVID-19-friendly” delivery options, were able to remain open, albeit with decreased sales volume. Despite all efforts, the trickle-down effect will likely cause several restaurants and retailers to permanently close and not survive this downturn at all. As Phase I and II of North Carolina’s economic reopening went into effect and additional stores began to reopen in some capacity, retailers began to adapt to new ways to operate with safety protocols in place. As a result, more discounts and flash sales were offered, and curbside pick-up became a prevalent way to shop. The next six months should reveal how the COVID-19 pandemic …

July 6, 2020

Industrial Market Reports North Carolina Southeast Southeast Market Reports

Charlotte Industrial Sector Shows ‘Signs of Life’ as Market Adapts to COVID-19

by John Nelson June 29, 2020

Like many Southeastern markets, the Charlotte industrial market largely hit the pause button from mid-March until June due to COVID-19. While the impacts of the health crisis remain fluid, the market is showing some signs of life, and trends that have long been at play are not likely to be reversed. For the past 90 days, the market has seen a significant drop in leasing and sales activity. The market was a bit sluggish in 2019, but experienced good activity in the first quarter prior to area shutdowns. Asking rents rose 5 percent year-over-year to $4.81 per square foot as new space is being added to the market at a higher price point. That rental rate is a record high for the Charlotte warehouse and distribution market. Most of the recent growth has occurred in the Cabarrus County, Stateline and Airport/West submarkets. Developers continue to fill demand for modern e-commerce, third-party logistics and general distribution space. Additional deliveries will keep upward pressure on vacancy in the near-term, but overall conditions should remain healthy thanks to strong economic tailwinds and Charlotte’s proximity to key East Coast transportation corridors and population centers. Absorption declined significantly over the past 12 months, from 5.3 …

June 29, 2020

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