Trends in office development show that Charlotte's high-tech sector is expanding. "High-tech jobs are up 10 percent over last year and up one-third over the past three years," says Brandee Barnhill, marketing coordinator at Crescent Resources. Examples of this growth are GE Polymerland and Unifi Technology. Barnhill also notes that downtown Charlotte remains one of the most active markets with two major office projects underway and at least two more being planned.

The Airport/Interstate 77 Corridor is another area where major development is taking place due to the proximity of the airport and the central business district, as well as good road systems. Ballantyne, an "edge city" that has its own development bordering Charlotte, is also a hot area for development. The Northeast/University Research Park area is also receiving a lot of attention from developers because of its labor supply, excellent road systems, proximity to the University of North Carolina at Charlotte, numerous housing opportunities and vital technological market.

Significant developments in the Charlotte area include the 960,000-square-foot, 46-story Hearst Tower, which is already 96 percent pre-leased with completion more than a year away. Other developments are Bank of America/Gateway Village located on West Trade Street and TIAA/CREF at University Research Park. Overall, these developments will reduce the unemployment rate in Charlotte.

Tenants absorbing the majority of office space in Charlotte are Bank of America, First Union and TIAA/CREF. "Banks have played a great role in the job market in Charlotte," says Barnhill, noting that financial jobs also include non-bank services such as brokerage houses, insurance companies and real estate firms like Allstate Insurance and Royal and SunAlliance, companies that have signed significant leases recently.

Other major leases in the area include 112,000 square feet of the Four Coliseum Centre by BF Goodrich Co.; a new 80,000-square-foot consolidated call center and technical operations at Whitehall by Time Warner Cable; a 190,000-square-foot lease in the Northeast Quadrant by McKesson HBOC; 101,000 square feet at Huntersville Business Park by G.E.; and Microsoft signed a lease for 300,000 square feet at Arrowpoint Office Park.

Class A rental rates in Charlotte range from $19 to $24 per square foot in the suburbs and $24 to $30 per square foot uptown. Vacancy rates are at 9.8 percent in the suburbs and 1.5 percent uptown.

The I-77 Southwest corridor is an area to keep an eye on in the future, according to Barnhill. "With Interstate 485's completion, we now have easy access to and from south Charlotte, which will enhance development there," she says. This area is also close to extensive residential development in south Charlotte and has numerous amenities. Another emerging submarket is the University area because of its strong technology presence in University Research Park and its labor pool, abundant housing and close proximity to I-77/85 and UNCC.

As for the future of Charlotte's office market, Barnhill says the major submarkets should continue to receive a good amount of development. "Anticipated growth continues to spur new development in all major markets, with a majority of development in the I-77 Southwest corridor, Ballantyne, and the University area," she adds.

Brandee Barnhill serves as marketing coordinator with Crescent Resources.


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