The Queen City Continues to Emerge as a Growing Technology Market
- Rising demand from the technology sector continues to push office rental rates in the CBD and Southend/Midtown submarkets to new levels.
- With a combination of fintech job growth, bank mergers and new headquarter announcements, Charlotte is remaining as one of the hottest office markets in the U.S.
- Charlotte continues to gain national recognition as it took the #4 spot in Urban Land Institutes “Markets to Watch” annual ranking.
- Overall vacancy rates were slightly lower this quarter at 8.1% compared to 8.9% last quarter. However, Class A vacancy rates decreased by 1.4% from the previous quarter coming in at 8.9% compared to 10.5% in Q2 2019.
- Some of the most notable leases were Lowe’s taking 200,922 SF at Charlotte Plaza; Hearst Publishing moving into 77,000 SF in Toringdon 7 and Level Brands inking a deal for 50,000 SF at 8845 Red Oak Blvd. within the Airport submarket.
Q3 2019 Office Market Summary
The technology sector has been a focus for robust activity and strong growth as of Q3 2019. Notable companies, like Lowe’s, Microsoft, and LendingTree, have chosen to expand their office presence in Charlotte and are driving new-to-market players, such as Better.com, Mitsubishi UFJ Financial Group and Moody’s Corporation to do the same. A strong demand for premium assets, driven by expansions and relocations, has provided an exciting leasing scene in Charlotte’s urban core. This influx of office demand has begun to outpace supply driving rental rates higher, creating quite the competitive landscape.
Urban Land Institutes listed Charlotte on their annual ranking of “Markets to Watch” as the Top 5 City for First Time Investors. With a thriving financial industry, millennial growth and a tech savvy workforce, confidence is running strong for the Queen City. Moving into Q4 2019, tenant demand is expected to continue to rise, as companies’ eye high quality assets with desirable amenities. Substantial demand will keep driving unprecedented growth in rental rates across the market as developers continue to build and add record levels of new office inventory.