4/15/21 Charlotte Mastermind Group Meeting

Charlotte April 2021 – Key Take Aways

• Grant Miller with Colliers led off the meeting with an informative look at the Charlotte Industrial Market.  The Charlotte Industrial market is 343.1M SF of total warehouse and flex space encompassing over 5,000 buildings with a vacancy rate of 5.8% with 4.65 million SF under construction as of the 1^st quarter of 2021.
• The Market landscape is growing from a household consumer market to a bulk regional distribution market.
• The four largest speculative projects that have recently delivered or are under construction were 100% pre-leased.
• Joe Marek with Johnson Allison Hord has been hearing a lot of unsettled news about office leasing with the report of the 1^st quarter of 2021 coming in.  Two weeks ago, the Wall Street Journal reported that national office rents are down 13% and 17% in the New York region.  However, the Charlotte Biz Journal painted a much more positive picture saying that office rates have held almost steady through out the year.  Although this may not include concessions and TI that are behind the scenes.
• Neal McElveen and Patrick Korn with Terracon are both extremely busy with due diligence, upfront phase 1, wetlands and geotechnical work along corridors and up 85 and 77 North.  Patrick touched upon the regulatory updates surrounding clean water act and how the process has gotten a bit more cumbersome.  He stressed starting the due diligence as early as you can.
• Seeing a good bit of movement to the Charlotte area and seeing a lot of headquarters wanting to shift to the area as well.  People are trying to attract groups that are not able to travel by getting more creative, i.e. virtual tours. etc.  (Santina Hughes, CoStar Group)
• Insurance costs are continuing to increase.  Working with lenders to get them to waive the builders’ risk at closing, with the cost of insurance it a good idea to push this off until you are ready to go vertical, saves a lot of money.  (Will Giambalvo, Gallagher)
• 1031 transactions are very busy, Matt Linville with Bankers Exchange has completed more transactions in the last 3 months that all last year, which was a record year itself.  He also said that he had his first in-person presentation this week, to a large group of bankers.  People are starting to open their doors and meet again – very positive sign.