The Charlotte, N.C., workplace sector had a sluggish first quarter of the yr, with solely a single constructing delivered, based on CommercialEdge information. The metro’s complete funding quantity within the first three months of 2025 additionally lagged behind nearly all of its friends, clocking in at $20 million.
On the finish of the identical month, the market had solely 527,903 sq. ft beneath building and was on par with the U.S. common of 0.7 p.c of complete stock. Nationally, solely 2.6 million sq. ft of workplace house broke floor within the first quarter, out of which 156,124 sq. ft had been in Charlotte. Nonetheless, regardless of a 2.1 p.c year-over-year improve, the market’s emptiness price was properly under the 19.9 p.c U.S. common.
Workplace completions shrink, improvement sluggish
Charlotte’s workplace improvement pipeline as of March comprised solely 527,903 sq. ft beneath building, based on CommercialEdge. This determine represented 0.7 p.c of its complete stock—on par with the nationwide common.
Underneath-construction and deliberate workplace house represented 4.1 p.c of current inventory. The market fared higher than Dallas (3.9 p.c) and Tampa (3.8 p.c) however lagged behind Nashville (4.8 p.c). Austin ranked first nationally, with 11.4 p.c.
Crescent Communities is ready to interrupt floor this yr on Carson + Tyron, a two-building campus between the Uptown and South Finish neighborhoods. The mission will embrace 560,000 sq. ft of Class A workplace house, in addition to retail, lodge and multifamily elements.
When it comes to workplace completions, just one constructing got here on-line to date this yr. The property is a medical workplace constructing spanning 36,124 sq. ft. Flagship Healthcare Properties is the proprietor.
Traders proceed to depend on conversions
As emptiness charges soared throughout most markets, the development of changing workplace areas into residential items emerged as a compelling selection for property homeowners. Final yr, CommercialEdge launched the Conversion Feasibility Index, a software powered by Yardi that evaluates the potential of workplace buildings for conversion by contemplating components like walkability, floorplate configuration and the constructing’s age.
At first of the yr, Charlotte had 1,787 office-to-residential items in numerous levels of conversion. That quantity nearly doubled year-over-year and is anticipated to proceed to develop by 2025. Moreover, there have been eight workplace buildings that had a CFI rating between 90 and 100, which means they might be appropriate for a simple redevelopment.
In March, a three way partnership of Rockefeller Group, MRP Realty and Asana Companions obtained financing for Brooklyn & Church, a $251 million, 460-unit conversion of the previous Duke Vitality headquarters. The property’s CFI rating was 81, which means the homeowners may encounter some difficulties through the redevelopment course of.
Charlotte’s workplace gross sales quantity among the many lowest nationally
Charlotte’s workplace gross sales quantity year-to-date as of March clocked in at simply $20 million, the smallest gross sales quantity within the South. The metro lagged behind most of its peer markets moreover the Inland Empire ($4 million).
Moreover, belongings within the space traded for $81 per sq. foot, properly under the $183 nationwide common. Solely Chicago ($68 per sq. foot), Detroit ($80 per sq. foot) and the Twin Cities ($63 per sq. foot) commanded decrease costs among the many largest U.S. metros.
At first of the yr, Carolinas Properties acquired a 125,265-square-foot workplace constructing at 4100 S. Stream Blvd. for $8.1 million, based on CommercialEdge. Shopoff Realty Investments offered the asset at a reduction in comparison with its $17 million earlier sale worth.
Workplace emptiness price rises, nonetheless beneath nationwide common
Charlotte’s workplace emptiness price on the finish of the primary quarter clocked in at 16.6 p.c, marking a 210-basis-point year-over-year improve. This determine was under the 19.5 p.c nationwide common and peer metros Nashville (18.4 p.c) and Dallas (24.2 p.c). San Francisco (28.6 p.c) posted the very best price within the nation.
The market’s common itemizing price throughout the identical month was $35.3, marking a 13 p.c improve year-over-year and barely above the nationwide common of $33.4 U.S. The metro surpassed Dallas ($31.4), Phoenix ($28.6) and Houston ($29.4).
Coworking sector stays regular
Charlotte’s coworking sector comprised 1.4 million sq. ft throughout 95 places as of March. The house accounted for 1.7 p.c of the entire leasable workplace stock, on par with the determine registered throughout the identical month final yr. Nonetheless, the metro lagged behind the two p.c nationwide threshold and peer markets akin to Phoenix (2 p.c) and Atlanta (2.3 p.c).
Regus remained the most important coworking operator within the metro, with 169,784 sq. ft throughout 14 places. The corporate was adopted by Souder Properties with 130,633 sq. ft and WeWork with 96,916 sq. ft.
