Avison Young in Charlotte
Established in early 2014, Avison Young’s Charlotte office has become one of the area’s premier client-focused, full-service providers of commercial real estate services. With approximately 3.8 million square feet of property under leasing assignment and 3 million square feet under property management, our team of experienced professionals cover all major industry sectors including office, industrial, retail, mixed-use, development and investment. We provide services for owners and investors of commercial properties, and for users and occupants.
One of the nation’s top 20 largest cities, Charlotte is the second largest financial center in the U.S., behind only New York City, with a total of more than $2.3 trillion in assets. The city is home to no less than nine Fortune 500 companies, and Mecklenburg County boasts approximately 1,100 manufacturers to generate a payroll of $3.1 billion. With an additional 3,300 manufacturers employing more than 110,000 workers, and every major sector represented, business and commerce sectors are vibrant and strong. The greater Charlotte metro area has a population of more than 2.4 million people. The City has a highly diversified economy and an international business climate with more than 950 foreign-owned companies in the metro area. While the finance, manufacturing, and technology sectors all have a major presence, Charlotte is consistently named a top city for entrepreneurs wishing to start their own business.
With more than 50 million square feet of office space, the Charlotte office market witnessed another year of strong absorption and rising rental rates in 2016, giving developers the confidence to fill the construction pipeline with both build-to-suit and speculative projects. The addition of new space will be a welcome development for tenants, who currently face the tightest market conditions in nearly 10 years. While construction deliveries may drive an uptick in Class A vacancy in the near term, the Charlotte office market is poised to remain strongly in favor of landlords in 2017. Developers have exercised more discipline in recent years than in previous cycles, and preleasing activity is strong. Additional leasing options on the ground will be a positive for the market in helping to attract new businesses to the region.
As one of the fastest-growing regions in the U.S., Charlotte has a thriving retail market. Vacancy ended 2016 at just 5.8%, the lowest rate since 2006. Retail construction has been modest throughout the recovery, helping to drive vacancy lower despite the ongoing disruption from e-commerce facing retail owners nationwide. Robust economic and population growth are fueling an influx of new-to-market retailers, particularly grocers and new restaurant concepts. Discipline on the part of developers should keep vacancy in healthy territory in 2017 as more retailers expand into the rapidly growing Charlotte market.
The Charlotte metro area serves as North Carolina’s largest industrial market, comprising 184 million square feet. Demand from Charlotte's industrial tenants surged in 2016, driving vacancy to a 16-year low despite the delivery of 3 million square feet to the market. Strong leasing activity and limited availability continue to drive new construction and place upward pressure on rental rates, a trend that is poised to continue over the next 12 months. With strong demographics, robust economic growth and excellent access to infrastructure, Charlotte will continue to attract industrial users. Located within a one-day drive or one-hour flight of 50% of the nation's population, the region is well positioned to benefit from the nationwide industrial expansion being driven by the explosion of e-commerce.
The Charlotte market closed out another year of healthy demand from commercial real estate investors in 2016. Transaction volume totaled $5.1 billion, up 38% over prior year. Multi-residential sales led the way with $2.5 billion in volume, up 67% over 2015. Office sales increased by 23% to $1.6 billion, while retail sales held steady at $449 million and industrial sales decreased to $458 million. Following five years of unusually strong activity, hotel sales totaled $57 million in 2016, down 78% over the prior year. With leasing fundamentals strong across all property types and yields still incredibly attractive when compared to larger Tier 1 markets, the Charlotte region should continue to attract robust investment activity in 2017.