We asked our 2009 Deal Maker Top Producers (based on 2008 production) to provide their thoughts about the market in 2009, and what is in store for 2010 and beyond.
Office Report
by Brad Grow, Colliers Pinkard
Recession pricing and market uncertainty were the driving factors for decisions by both tenants and landlords in the Charlotte office market during 2009.
Charlotte’s 74 million SF office market’s citywide vacancy rate increased from 13.5 % at the end of 2008 to almost 16% at the end of 2009. Coming off historical high rental rates in 2008, the citywide average asking rents dropped approximately 15% in 2009 to $19.30 per SF at year end. Charlotte’s largest, class A submarkets of Downtown/Midtown, South Park, and Airport experienced the most negative absorption, while Highway 51/Ballantyne, University, and East posted the only positive absorption gains during 2009.
Though the “Great Recession” slowed Charlotte’s office market, deals were done in 2009. Landlords adjusted expectations and focused on maintaining and securing occupancy, while many tenants began shopping for just the right deal. Early renewals and the restructuring of existing leases was the trend in 2009 and will continue into 2010.
Market psychology has shifted towards cautious optimism looking into 2010 with Bank of America’s CEO transition settled coupled with new notable corporate headquarters relocations to Charlotte, such as Electrolux (728 new jobs!). Tenants will continue to “call the shots” with weak job growth, weak demand, and generous supply in most submarkets.
Editor’s Note:
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