AM_Carolinas Discover CLT_Q4 2018 | Page 16

Charlotte Q4 2018 Office Insight Honeywell, AvidXchange lead the tech charge into 2019 • Honeywell and AvidXchange announcements key to Charlotte’s expansion as one of the nation’s most attractive cities for IT & FinTech services. • Charlotte ranked the #1 high growth market for tech talent in the US by Forrester Research. • Late surge caps strong year for capital investment, closing 2018 with an estimated $1.3 billion in transaction volume . In 2018, Charlotte cemented itself as a major player among top tech cities in the nation. Recently, CompTIA ranked Charlotte as America’s ‘Top Tech Town’ for IT professionals to live and work. From 2012-2018, IT jobs in the Charlotte region grew by 53%, reaching over 42,300. Charlotte’s commitment to tech recruitment paid off in Q4, when city and state officials announced Honeywell, a Fortune 100 tech company, selected Charlotte for the relocation of its national headquarters from New Jersey and will bring 750-800 jobs to Charlotte by 2024. AvidXchange announced plans to more than double in size over the next five years, adding 1,200 jobs and investing $41 million in expanding its campus. Net absorption in the fourth quarter was buoyed by Albemarle’s occupancy at Capitol Towers North, accounting for 53% of the 263,970 square feet absorbed market wide. As a result, the total vacancy rate dropped slightly from 13.9% in Q3 to 13.4%. Another crane will dot the Charlotte skyline as Dominion Realty Partners breaks ground on their mixed use development in Uptown that will add an additional 158,000 square feet of office to the pipeline. Compared to Q4 2017, Charlotte average asking rents have increased by 8.3% from $26.57 to $28.70 to close 2018. Lincoln Harris sold Capitol Towers in SouthPark for a reported $209 million. Notable tenants between the two towers include DHG Accounting, MassMutual, Citizen’s Bank and Albemarle. The sale capped off a year in which there was an estimated $1.3 billion in office sales as investors continue to target Charlotte’s favorable business climate. Outlook Employment drives growth. The region added 32,000 jobs in the last 12 months. As a result, 65% of the 3.2 million square feet of new construction is preleased. This is both impressive and significant as Charlotte’s CBD construction is among the nation’s largest. Fundamentals YTD net absorption Forecast 480,566 SF ▲ Under construction 3,337,970 SF Total vacancy 13.4% Average asking rent $28.79 PSF Concessions Rising Supply and demand (SF) Net absorption Deliveries 2,000,000 1,500,000 1,000,000 500,000 0 2015 2016 2017 2018 Total vacancy 13.4% 12.7% 2015 11.5% 11.5% 2016 2017 Average asking rents ($/SF) 2018 Class A Class B $35.00 $30.00 $25.00 $20.00 $15.00 For more information, contact: Thomas Passenant | [email protected] 2015 2016 2017 2018 © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. 16 ▲ ▲ ▲ ▲