South End relocations detract from return to office growth in CBD submarket
- Six deals of 50,000 sf or greater signed in Q1 2022, which is a welcome sign to the Charlotte office market
- The return to office of several large uptown tenants such as Bank of America, Wells Fargo and Ally has breathed new life back into a struggling CBD submarket.
- South End continues to be the juggernaut of the Charlotte office market with over 490,000 sf absorbed in Q1 2022.
- Suburban office submarkets are slowly recovering from the pandemic, with submarkets such as SouthPark and University posting positive absorption for the first time since the start of the Pandemic.
While many office occupiers have returned to work in the CBD submarket, there is still much to be done to reach pre-pandemic levels. CBD currently has the largest amount of available space on the market and that number continues to grow with a multitude of tenants relocating to South End office projects. Alston & Bird, Brightspeed and CBRE have all signed leases at Spectrum’s Vantage Development and will be leaving their uptown locations.
However, with the fall off of office deliveries in South End, options are becoming more and more limited and CBD should benefit from South End’s lack of supply. The Vantage Development is almost 100% leased and Portman’s office development, The Line, is already 40% leased. This fall off of office deliveries can be directly attributed to Covid as many developers held off on breaking ground on their respective projects until there was more certainty in the market. However, by 2024/2025 there will be plenty of office space to choose from in South End. In the meantime, expect to see CBD rebound in the coming months as larger occupiers look for new space.