Office Submarket Reports

Q1 2022

OVERVIEW

The Central Business District is Charlotte’s largest office submarket (25 million SF), comprised largely of corporate HQ’s and regional hubs for many global professional services organizations, and new developments. The CBD is predominantly comprised of Class A, institutionally owned assets, and an unusually large percentage of owner-occupied buildings when compared to national avg’s. This is largely attributable to the presence of ‘the Big Banks” and Charlotte, enjoying its current run amongst the hottest RE investment markets in the United States. The CBD is in a transition period and relative uncertainty amidst ongoing impact of the COVID-19 pandemic, shifts in corporate real estate occupancy trends, ongoing development and broader demographic including significant labor migration. 

DATA, TRENDS AND CONSIDERATIONS

The CBD is currently seeing a trend of tenants relocating to nearby urban submarkets and increased sublease inventory. This, along with newly developed assets delivering has triggered the onset of owners investing in new tenant amenities to retain current and lure new tenants. Further, substantial new development in the nearby Southend submarket, indicates the CBD may soon experience negative absorption. Currently at 13% vacancy is the CBD is on the rise, though the avg. rental rate ($36.91) is also and investor activity remained strong accounting for 35% of all transactions in Charlotte last year.