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2022 Q2 Office Charlotte | Market Report

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CBD, South End paint contrasting picture of office market amidst future uncertainty

“The Charlotte office market took another step toward pre-pandemic leasing levels, lead by CBD’s resurgence and ongoing demand for space in South End. However, troubling economic indicators on the horizon could be potential deterrants to further growth. ” Research Analyst, Blanton Hamilton

Key Takeaways

  • Charlotte’s office market continues to expand as 5.38 MSF of new office product is currently under construction
  • CBD saw negative net absorption for the second straight quarter, as tenants continue to relocate to South End 
  • South End remains one of the hottest submarkets in the country, posting over 4x more net absorption than any other submarket in the Charlotte MSA
  • Uncertainty lies ahead as rising interest rates and inflation pose as potential headwinds to future growth

Despite seeing the largest signed lease of Q2, CBD posted its second straight quarter of negative net absorption. Robinson Bradshaw signed at Lincoln Harris’ Legacy Union Development, which seemed like the shot in the arm the submarket needed to return to pre-pandemic leasing levels. In reality, tenants continue to flock to South End, favoring its strong workforce and attractive amenities. Two recent companies to relocate from the CBD to South End are Silicon Valley Bank and Foundry Commercial. South End’s lack of supply will slow growth and provide outlying submarkets an opportunity to sign tenants with immediate needs.

LoSo Station and 2825 South are two new office developments that are expected to deliver almost 330,000 SF combined within the next year. Even if their delivery dates are delayed, Freemorewest has emerged as the next upcoming office submarket thanks to its numerous adaptive reuse projects and proximity to uptown. The submarket has become a popular alternative to South End and should continue to see positive absorption going forward.

There are some concerning macroeconomic indicators that could stall office growth going forward. Economists are expecting interest rates to continue to climb after already increasing by 150 basis points so far this year. To add to that, consumer confidence has started to fall as inflation has reached its highest level in 40 years. These trends are concerning as they could significantly impact tenant demand and capital markets activity.


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2022 Q2 Office Charlotte | Market Report

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Related Experts

Bryan Johnson

Executive Managing Director

Charlotte

A father of 4 with over 20 years in the commerical real estate industry leading a group of diverse and talented profoessionals as the market leader for the Colliers Charlotte Office.  Bryan is an accomplished real estate executive with proven experience driving top line revenue growth by creating solutions that allow customers to focus on their core business. Expert in global finance and international real estate, with a strong focus in the healthcare sector. Adds value through an ability to turn around struggling organizations, as well as to build pipelines that allow for continued growth and profitability.

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Blanton Hamilton

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Blanton is a Research Analyst with
Colliers | Charlotte, responsible for
refining the methodology of the
collection and evaluation of office,
retail, and industrial market information
across the Charlotte region of North
Carolina.
Blanton is also responsible for planning
and executing specialized research
projects for Colliers’ corporate solutions
clients as well as participating in client
presentations. As an analyst, Blanton
brings many years of market experience
which allows him to provide the highest
quality of research services to Colliers.

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Brad Grow

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Brad Grow specializes in office services focusing primarily on Tenant Representation. He brings over 19 years of local and regional transaction experience. In addition to numerous institutional and regional developer clients, Brad specializes in the representation of professional services firms and law firms in the Charlotte market.
 

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Prior to joining Colliers, Brad served as a Special Agent with the United States Secret Service working both protection and investigative assignments involving money laundering, counterfeit currency, credit card fraud and mortgage fraud.

 

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Brent Royall

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I'm an expert in helping office users find the best solution for their office space needs - this has been the focus for over 22 years both in Charlotte and across the United States.

Whether working with a bootstrapped tech start-up looking for edgy office space or a global accounting firm wanting to modernize their image in the central business district or even a Fortune 500 wanting to optimally locate a high density, 1000-employee shared services group, I have the skill and experience to minimize risks and maximize opportunities...saving the client significant dollars in the process while protecting their long-term business interests.

 

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Kim Kendall

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Kim is Senior Director of the Office Agency Leasing team at Colliers in the Charlotte office. She has 19 years of experience in commercial real estate with a focus on new business development and increasing asset value to office properties she represents. Kim is experienced in all aspects of commercial real estate including acquisitions, site selection, comparative financial analysis, real estate consulting and landlord and tenant representation. 

Kim has negotiated more than $1.3 billion worth of office, industrial, medical, and retail leases in the Carolinas, including prominent clients such as Wells Fargo, Cigna, Procter & Gamble, Sonic Automotive, Siemens, Credit Karma, Kimberly-Clark, and The Lincoln National Life Insurance Company.

Prior to joining Colliers, Ms. Kendall worked for Northwood Office where she was responsible for leasing a 4.7 million SF office portfolio in Charlotte, NC. Earlier in her career she worked at The Bissell Companies leasing their 4.4 million SF portfolio in Charlotte and at JLL (formerly The Staubach Company) representing corporate users with their industrial and office space requirements in the Carolinas. 

 

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Casey Sherman

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