The momentum in Charlotte’s office market continues into 2025, showcasing a strong first quarter marked by positive net absorption and a surge in multi-market tenant prospects. We are currently seeing three times as many expansions as downsizing among tenants, indicating a psychological shift among decision-makers across various industries.
Despite some large vacancies affecting the overall market rate, the narrative on the ground in Charlotte is one of optimism and urgency. A few factors contribute to this trend, including companies are increasingly bringing employees back to the office, and those that overcorrected their space needs post-pandemic are reassessing their strategies.
Particularly interesting is the demand for Class A office space in Charlotte, a thriving Sun Belt market. The most sought-after buildings in prime locations are nearly full, leading to reduced concessions and rising rents. This stands in stark contrast to reports of distressed assets negatively impacting modern office investments.
Furthermore, the number of quality subleases are limited, and new construction is expected to come to a halt soon, particularly as remaining spaces in 110 East and Legacy Union are leased, most likely by year-end.
If last year is any indication of a fundamental positive shift in the office sector, we can anticipate an intriguing 2025 and 2026. Our leasing team alone completed over 1.4 million square feet of lease transactions in 2024. Notably, nearly 52 percent of these transactions were long-term leases for new or expanding tenants, demonstrating a willingness to invest in their space rather than opting for short-term renewals.
What fuels our optimism for the future is the increasing average size of deals across all product types and submarkets. Full-floor leases of approximately 25,000 square feet have become a common feature in our leasing reports and client discussions, signaling a robust and evolving office market in Charlotte.
— By Joe Franco, Senior Vice President, CBRE. This article was originally published in the June 2025 issue of Southeast Real Estate Business.