Phone: 704-347-8942

Toll Free: 800-554-4373

Charlotte Regional Partnership
550 South Caldwell Street, Suite 760
Charlotte, NC 28202

Thank You

Thank you for contacting us.

Subscribe to email updates
* indicates required

Subscribe to this blog via RSS RSS Icon

Q&A with some of Charlotte USA’s best commercial real estate minds

Howard Bissell III, Senior Vice President and Director, The Bissell Companies
John W. Harris III, Chief Operating Officer, Lincoln Harris
Landon R. Wyatt III, Partner, Childress Klein Properties

What is the single biggest real estate trend your company is seeing in the Charlotte USA market?

Harris - In the past 12-24 months, we have seen institutional capital moving from major markets like New York, San Francisco and Washington DC.   Groups such as Starwood Capital, Parkway, Goldman Sachs and others have come to secondary markets like Charlotte in order to meet the returns required for their capital.  The inflow of major corporations such as Chiquita and MetLife along with the steady growth of the employee base at Wells Fargo and Bank of America, make Charlotte a perfect fit for investment of this institutional capital. 

Wyatt - We’ve started to see a definite movement towards the consideration of the Charlotte region as a whole.  More and more, companies are considering alternatives across our regional marketplace, recognizing that while each community (and state) is different, the similarities increasingly outnumber the differences.  Communities within our region can no longer count on being “the” location for a particular industry if a different location within the region is able to deliver on development better, faster or more economically.

Bissell - Not so much in the entire Charlotte USA market which is a 16 county region, but in Charlotte and several immediate surrounding counties…The re-birth of residential housing first in apartment development over the last 36 months in urban and several suburban Charlotte locations;  followed by homebuilders acquiring lots either from investors flipping lots they had acquired at heavily discounted prices at the beginning of the recession; and/or homebuilders direct purchases from banks and other financial sources who were left holding lots after many developers went under during the recession.  The majority of these lots were proposed new subdivisions, with infrastructure in place, referred to by many as pipe towns due to the graded lots with utilities in place, etc. as evidenced by the stubbed pipes at each graded lot.

What’s coming quickly is the return of homebuilders resuming purchases of raw land, and zoning requests for future neighborhoods as the lots that were purchased during and post-recession have largely been absorbed in the “class A locations.”

There seems to be more of an interest and willingness to invest in speculative buildings, if you agree, how is your company helping communities build their real estate capacity?

Wyatt - Our company is actively developing speculative buildings, both office and industrial, in several different parts of our region.  We have a 310,000 square feet industrial building under way in Mecklenburg County, a 360,000 square foot industrial building starting in Cabarrus County, in addition to office development underway in York County.

Bissell - I would disagree with this statement.  With the exception of residential, as outlined above, there has not been much speculative development in the region over the last few years.   The only 100% speculative development has occurred in Ballantyne with office construction, and a limited number of industrial projects in Charlotte and some surrounding counties, which include some public-private partnership developments.  Lenders are not prepared to provide financing for new projects without some level of preleasing.  Regarding the office market in Charlotte and the region, there is no speculative development occurring today.  However, with demand for office space steadily improving, speculative development may return soon to Ballantyne, SouthPark, and the University area, based on recent announcements addressing rising demand in those submarkets.  Other announcements have been made for projects, including Uptown and Toringdon, however, to date, these projects have noted pre-leasing as a requirement to start construction.

Harris - The continued inflow of capital into Charlotte drives demand which will increase the need for development in a more speculative nature.  Here at Lincoln Harris, we have seen this with the increased demand for large contiguous blocks of space especially in SouthPark, a major submarket in the Charlotte area.

Lincoln Harris currently has plans to build Capitol Towers, a “live, work and play” development in SouthPark.  We feel strongly that this will meet and exceed the demands of major companies relocating to this area as well as fill the needs of tenants in a changing environment.

How do you see the real estate market changing in Charlotte USA over the next year?

Bissell - Charlotte USA, most specifically at its core, continues to evolve as an employment center.   The area continues to draw individuals of all ages looking for employment, and in more recent years, we have seen the area become home to more active retirees and the growth of communities such as Sun City.   These trends should lead to continued growth in the single family residential market, retirement communities and continued groundbreakings for new apartments.  While employers may not return to pre-recession levels of hiring, the pendulum has begun moving in the right direction.   Companies that have restrained from hiring, are beginning to hire again, and thus market observers expect to see some new office projects begin in 2014 as demand from expanding companies in specific submarkets, support new construction.  Announcements would also lead market observers to expect to see more ground breakings from industrial developers as demand for space has driven vacancies to single digit levels.  Rising demand coupled with the new intermodal facility at Charlotte’s airport should allow for growth not only in Charlotte but in surrounding communities as available land is absorbed, and investments are made to assist with the region’s infrastructure and transportation network.    

Harris - As a result of the institutional capital investing in existing real estate, we feel the rental rates will be pushed to a point in which development will make more economical sense, vs purchasing existing assets.  This will allow for the development of new and more efficient space to meet local demands as well as the requirements of companies relocating to the area.  Charlotte’s strong workforce should continue to bring major corporations to the area.

As the Millennial Generation grows within the Charlotte workforce, we will see companies becoming more strategic with their work space to accommodate these younger and more mobile employees.  This will drive the demand for more state-of-the-art, urbanized developments in the area.    

Wyatt - We see continued growth for our region for 2014.  While there will be available alternatives for most users, as the market comes into balance it will be important for real estate users to follow a determined decision making process.  Delayed decisions will increasingly come with consequences.

Enjoy this post? Share it with others.


Leave A Comment

Commenting is not available in this section entry.