Q3 2023 Industrial Market Report | Avison Young Charlotte - Charlotte
Charlotte industrial real estate market reports
4Q 2023 highlights and trends
Charlotte industrial market trends
The fourth quarter of 2023 demonstrated the resiliency of the industrial real estate market in Charlotte, NC. Key trends such as the expansion of e-commerce, increasing focus on sustainability, and the growth of the manufacturing sector have contributed to the robust demand for industrial properties. The Charlotte market is expected to remain competitive in the coming year as businesses continue to capitalize on the region's strategic location and favorable business environment.
Buyer investment demand for small-bay industrial facilities out paced any year prior in terms of transaction volume. Pricing for this asset type fell -6%, the smallest adjustment across all other asset types during a period when financing is costly and overall capital markets volume is slow.
Gross leasing volume
Despite a fall from 2021 & 2022 activity levels, the leasing market in 2023 was exceptional, recording more total SF signed over twelve months than in any year prior to 2021. The average NNN lease rate across all industrial asset classes dropped slightly year-over-year to $6.47, and the average lease size was ±85k sf.
Construction pipeline falls from historical high
Due to a prolonged period of elevated borrowing costs, new groundbreakings came to a standstill during 2023, and today’s construction pipeline has shrunken to a three-year low. We’re closely monitoring the market impact of limited preleasing options as Charlotte begins to experience a new product shortage for single-tenant offerings sub 100k sf.
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