Why The Charlotte Economy Will Continue To Power Office Demand
Charlotte started the year with great prospects, but now things are cloudier. Does Charlotte have the economic momentum to keep office space demand on pace with new supply? Find out at our Charlotte Office Development Forum at the Hilton Charlotte Center City on Oct. 25.
Portman Holdings VP of development Charles Pinkham, who will be a speaker, tells us the momentum of demand remains very good for supply coming online next year. "Though HB2 has certainly been impactful, and is causing uncertainty that makes raising new capital more of a challenge, for space that's underway or close to it, the Charlotte market remains very appealing."
Charlotte still has a lot going for it. "The cost of labor and living is attractive, the talent pool is stellar, and the market has become more diversified with energy and a growing tech market," Charles says. Further, Charlotte's one of the most attractive markets simply from the standpoint of cost of office space, with operating expenses much less than competitors. "There's no comparable market that can successfully support new construction with full service gross rates in the mid-$30s/SF."
Simpson Commercial Real Estate president Sam Simpson, who will also be a speaker, tells us supply and demand should remain in healthy balance. "Over the past 12 months, Charlotte added 11,500 jobs in the financial, professional and business service sectors," he says. "That 4% annual increase will be difficult to top in the coming year, but everything points to slightly slower job growth for this year. Still, those new jobs will continue to drive the demand for office space."
For example, if you assume five employees/1k SF, last year’s increase in professional employment would, in theory, require 2.3M SF of office space. "Continued job growth of this magnitude should easily allow the office market to stay in balance, even with 2M SF of proposed and new construction."
Find out more from Charles and Sam and our other experts at our Charlotte Office Development Forum at the Hilton Charlotte Center City, beginning with breakfast and schmoozing at 7:30am on Oct. 25.
