Speculative office development in Charlotte, North Carolina, has slowed dramatically, while build-to-suit activity remains strong, according to Ned Austin, marketing and leasing representative with Crescent Resources in Charlotte.

Currently, the majority of the new development is taking place in the South and Southwest submarkets, says Austin. “This is due to the completion of Interstate 485, Charlotte’s outer belt; the availability and variety of housing; the availability of services; and close proximity to the central business district (CBD), interstate highways and the international airport,” he explains.

Recently there has been more of an emphasis on mixed-use developments. Examples of this type of development include Crescent Resources’ 19-acre Carnegie Town Center in SouthPark, Crosland’s 20-acre Blakeney project in south Charlotte and Cambridge Partners’ 180-acre Ayrsley development in southwest Charlotte.

“These are the first large-scale mixed-use developments outside of the CBD, thus providing a new product type to the Charlotte market,” Austin says.

In the CBD, Gateway Village is a notable development. This project is part of Cousins Properties’ and Bank of America’s Gateway development. The first two buildings at Gateway Village total approximately 1.6 million square feet, and they are 100 percent leased. A third building totaling 470,000 square feet has been proposed for the project.

The Southwest, North and Northeast submarkets remain the most active development areas. This trend should continue because of the planned transportation and infrastructure improvements in these areas and the new light rail system servicing all three submarkets.

Currently no major tenant is absorbing space in the Charlotte market. Office activity remains soft, and the current city-wide vacancy rate is 14.5 percent. However, the financial services industry has a strong presence in Charlotte. An upturn in this sector could have an immediate effect on office absorption.

Although general office demand remains soft, Charlotte continues to make the list for new and relocating companies. This can be attributed to Charlotte’s low costs and a high standard of living that allow companies to recruit and maintain the best people as well as a superb corporate infrastructure. The eight Fortune 500 companies that have their headquarters locations in the city are further evidence of Charlotte’s attraction for businesses.

Ned Austin serves as marketing and leasing representative with Crescent Resources.