Why Charlotte's Population Growth's No. 2 Nationwide
Charlotte real estate's made a tremendous recovery over the past five years, when Bisnow held its first State of the Market event. But where is the market going from here? Come to our 5th Annual Charlotte State of the Market at 7:30am on April 20 at the Omni Charlotte Hotel and find out.
Selwyn Property Group partner Grey Poole, who will be one of our speakers, tells us that he sees continued strong investor interest in Charlotte commercial real estate, particularly multifamily, retail and office assets located in dense, infill submarkets. "Based on our discussions with investors, they appreciate the underlying fundamentals of Charlotte's population and job growth," he says, citing Census Bureau stats that put Charlotte second among the country's largest 25 cities for population growth between 2010-2013. Not only that, Charlotte's annual job growth from February 2014 to February 2015 was an impressive 4.1%.
Also among our speakers, Portman Holdings director Travis Garland, snapped with wife Anita, tells us there's certainly still enough demand to justify new commercial development. "In addition to strong office market fundamentals, the overall macroeconomics of Charlotte remain very attractive, which will continue to attract business opportunities," he says. For example: the Charlotte CBD has had an average annual absorption rate of 350k SF since 1996.
Absorption figures have been smaller in recent years, Travis adds, but that's primarily because there hasn’t been much product available to absorb since 2011 and 2012 (2010 had over 1.2M SF of absorption). "Flight to quality remains a strong trend among Charlotte office tenants," he notes. In fact, the city’s four most recent office buildings, which opened in 2009 and '10, totaled 2.8M SF—and they're currently over 99% leased.”
On the residential side, Ginkgo Residential CEO Philip Payne, also a speaker, tells us that multifamily supply in Charlotte finally caught up with demand—in some cases. "It depends on what segment of the market you are talking about and the location within the market," he says. The market's a long way from filling the need for affordable and workforce (middle market) multifamily housing in Charlotte, especially close to the CBD.
On the other hand, whether the market's there for high end and very high end multifamily is an open question that's likely to get answered over the next 12 months or so, as new units come on line, Philip adds. "There are lots of moving parts impacting demand—interest rates, job creation, wage growth, population growth, business profits, changing attitudes. How this plays out will be interesting." Pictured: the 144-unit Hawthorne at Commonwealth apartments, which Gingko acquired earlier this year. Sign up here for Bisnow's 5th Annual Charlotte State of the Market.
