- 2.6 million square feet (msf) delivered in 2019, while demand kept pace, accruing slightly under 2.6 msf of absorption
- Overall gross asking rents increased to $30.04 per square foot (psf) at the end of fourth quarter 2019, up 6.3% from $28.26 psf year-over-year
- There is currently 5.1 msf under construction that will continue to supply Class A office to the region
- In 2019, 11.4 msf of office traded in Charlotte, setting a record-high of almost $3.0 billion ($261 psf) in total sales transaction volume
- Multiple record-breaking transactions occurred during the fourth-quarter which included Highwood’s purchase of the Bank of America Tower (Legacy Union – Phase I) for $450.0 million ($535 psf) from Goldman Sachs & Lincoln Harris
Charlotte experienced a record-setting year, culminating the highest amount of absorption and deliveries in any given year by an overwhelming margin. A total supply of 2.6 million square feet (msf) delivered in 2019, while demand kept pace, accruing slightly under 2.6 msf of absorption during that time frame. There is currently 5.1 msf under construction that will continue to supply Class A office to the region as well as drive rental rate growth.
Major construction starts such as the Design Center Tower anchored by Lowe’s, Legacy Union – Phase III anchored by Honeywell and Metro Tower anchored by Duke Energy commenced construction in the fourth quarter 2019. Given the heavy preleasing of trophy-Class A office buildings, additional construction starts are plausible, as long as construction costs remain manageable and tenants are willing to pay premium rents. The sole competition in the last quarter of 2019 was Two Silver Crescent, an 88,000-square-foot (sf) office building developed by New Forum in the Airport submarket. This delivery marked the continued trend of speculative development occurring in suburban submarkets. Looking forward to first quarter 2020, Arrowood South (114,469 sf) and 2001 S Tryon St (31,713 sf) are expected to deliver, further increasing the suburban market supply.