1q’17 - srenc.com county 31,827,419 602 2,164,391 3.8% 346,904 0 0 $2.58 cleveland county...

Charlotte Industrial Market Report1Q’17

Charlotte’s 4.4% Unemployment Rate is below 2016 levels and below the national average as well.Charlotte’s Local Economy

Charlotte’s economy kept chugging along in 2016, with better-than-average GDP and job growth. This year’s economic picture is less clear. The U.S. economy grew at its slowest pace in three years during the first quarter amid sluggish consumer spending. The national GDP grew at a 0.7% annual rate, according to the Commerce Department. This was below estimates and marked the lowest growth in three years.

On the upside, the U.S. labor market is near full employment, so the first-quarter setback might be temporary. The Charlotte Chamber reports that Mecklenburg County’s unemployment rate fell to 4.4% in March, down from 5.3% the prior year. The number of people employed locally is rising at a faster pace than the country as a whole.

Mecklenburg County’s Consumer Price Index in March was unchanged from the previous month. The average home price for March rose 10% from the prior year to a new high of $307,412, according to the Charlotte Chamber. Monthly retail sales volume rose sharply early in the first quarter but has since declined.

Charlotte Market Overview

The vacancy rate for Charlotte’s industrial market stood at 4.6% during the first quarter, slightly lower than the rate at the end of 2016 and down from 6.7% a year earlier. It was the first time this decade the rate dipped below 5%.

Tenants moving into large blocks of space during the quarter included Pinpoint Warehousing, which took over 175,000 square feet on Tar Heel Road in Northwest Charlotte. Elite Logistix moved into 126,000 square feet at Rock Hill’s Legacy Park.

The largest lease signing during the quarter was Fireside Heart and Home Technologies’ deal for a 102,660-square-foot showroom and distribution center at Steele Creek Commerce Center in Southwest Charlotte. The new facility will have about 40,000 square feet more space than the company’s former facility at NorthPark Business Park.

Greater Charlotte Area(28 ± Mile Radius from Uptown Charlotte)

2017 1Q

Total Number of Buildings 5,733

Total Square Feet 221,445,105

Average Asking Rates $4.46

Overall Vacancy 4.4%

Net Absorption 1,137,788 SF

Deliveries 281,162 SF

Under Construction 4,068,372 SF

Charlotte, North Carolina

1Q 2017 INDUSTRIAL Market Report

9.7%9.3%

9.1%8.7% 8.6% 8.3%

7.8%

6.7%

6.3%6.1%

6.4%6.1%

6.5%6.1%

5.8%

5.0% 4.4%

3%

4%

5%

6%

7%

8%

9%

10%

7.1% Average Vacancy Rate

Vacancy Rates

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

-1,000,000-500,000

0500,000

1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,000

Absorption (RSF) / Asking Rates

2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%

10.0%11.0%12.0%13.0%14.0%

Charlotte Unemployment Rate

Avg. Asking Rate Absorption SF

Copyright: NAI Southern Real Estate 2017Sources: CoStar, NAI Southern Real Estate

1Q16 vs. 1Q17

DELIVERIES ASKINGRATES

VACANCYRATE

NETABSORPTION

Other large lease signings were the 65,000-square-foot deal signed by Utility Partners of America in Gaston County; and the 36,122-square-foot lease signed by Maslo on Tar Heel Road in Northwest Charlotte.

Boston-based Albany Road Real Estate Partners spent more than $60 million to purchase 14 flex and industrial buildings in the Charlotte area in a handful of separate transactions. The properties total nearly 600,000 square feet and include 77 Overlook in north Charlotte, Lakefield Corporate Center in Mooresville, Southcross Corporate Center in Rock Hill, and International Corporate Center in Concord.

The industrial market’s net absorption for the quarter was 942,312 square feet. That compares to positive 2.2 million square feet the previous quarter and negative-389,065 square feet the previous year.

The average rental rate for service-type properties was $4.34 per square foot, which was the highest this decade. The rate was largely unchanged from the end of 2016 and up from $4.11 a year earlier. Average rental rates for net lease properties was $4.44 per square foot during Q1, about the same as the previous quarter and up from $4.27 the previous year.

Southwest CharlotteFireside Hearth & Home’s 102,660-square-foot deal at Steele Creek Commerce Center was the biggest lease signing in the Southwest Charlotte submarket during the first quarter. Other major deals in the submarket include a lease signing for 83,200 square feet at Ridge Creek West III; 40,000 square feet at 3311 Beam Road; and 24,054 square feet at Nations Ford Business Park.

Northwest CharlotteMaslo’s lease for 36,122 square feet on Tar Heel Road was the quarter’s biggest lease deal in the Northwest submarket. Another top transaction was for 41,600 square feet at Northpark XVII.

AirportFoundry Commercial purchased a 106-acre tract of land for an industrial project in the Airport submarket. The property, formerly known as the Beltway Business Park, will be renamed WestPark 85. Foundry Commercial and capital partner Principal Real Estate Investors will develop 1.1 million square feet of industrial space at the site

Outlook Bullishness over Charlotte’s industrial market is reflected in a recent flurry of activity. A total of 18 buildings were under construction during the first quarter, covering 3.2 million square feet. The number of buildings matched the highest quarterly total over the past 10 years, while the square footage was the highest since the 2014 third quarter. Those are the only two quarters in the past decade when square footage under construction topped 2 million.

$3.00

$3.50

$4.00

$4.50

$5.00

2013

Q1

Q2

Q3

Q4

2014

Q1

Q2

Q3

Q4

2015

Q1

Q2

Q3

Q4

2016

Q1

Q2

Q3

Q4

2017

Q1

Class A Class B Class C

Meanwhile, Charlotte’s overall business environment is upbeat. A recent survey of business owners – conducted by SunTrust and reported on in the Charlotte Business Journal – reflected a generally bullish attitude about the national and local economies.

According to the survey, about 85% of Charlotte business owners surveyed say they are ready to achieve their financial plans and goals over the next five years. That’s higher than the national average of 77%. About 93% of Charlotte business owners say the current financial well-being of their companies is strong.

Asking Rates by Building Class

$2 $3 $4 $5 $6 $7 $8 $9 $10 $11

SouthCBD

Stanly CountyCleveland CountyCatawba County

Gaston CountyIredell County

I-85 / Beatties Ford RdLincoln CountyUnion County

Sugar CreekNortheast / University

Airport / WestNorth

Cabarrus CountySouthwest / 77

I-277 / 30th StreetYork County

EastTyvola Road

Freedom DriveI-277 / Remount Rd

Rates by Submarket




*Class A-C covers the entire 28± Mile Radius Market

Total SFTotal #

of BuildingsTotal

Available SFVacancyRate %

NetAbsorption

DeliveriesUnder

ConstructionEnd of 1Q

Average Rental Rate

Class A / (4 & 5 Star) 46,851,249 196 6,162,530 7.1% 871,842 216,000 971,875 $4.66

Class B / (3 Star) 69,420,722 951 5,904,052 3.6% 1,084,349 65,162 505,001 $4.20

Class C / (1 & 2 Star) 32,151,568 4,580 77,329,962 3.9% 848,803 0 0 $4.52

I-277 / Remount Rd 2,440,380 161 75,812 3.0% (17,269) 0 0 $9.93

Freedom Drive 2,113,559 90 112,774 3.6% 17,913 0 0 $7.73

Tyvola Road 7,275,938 388 298,640 3.0% (42,069) 0 0 $5.84

East 6,333,051 248 71,140 0.1% 69,249 0 21,600 $5.47

York County 21,722,576 340 1,579,810 3.5% 13,898 176,000 668,788 $5.20

I-277 / 30th Street 3,980,408 172 527,773 12.0% 20,607 0 0 $5.13

Southwest / 77 39,938,726 545 541,792 3.3% 541,792 65,162 841,170 $4.98

Cabarrus County 19,717,594 405 2,090,777 6.5% (41,381) 0 1,073,465 $4.65

North 18,413,112 307 1,063,240 2.1% 154,540 0 1,077,349 $4.64

Airport/West 13,979,877 374 1,424,474 8.4% (11,115) 0 159,000 $4.59

Northeast / University 4,921,640 177 92,747 1.5% 5,100 0 0 $4.48

Sugar Creek 10,468,487 472 334,050 1.7% 89,214 0 0 $4.36

Union County 14,616,161 567 441,867 1.7% 126,223 0 45,000 $3.76

Lincoln County 10,623,318 276 1,126,426 7.3% 366,877 0 20,000 $3.70

I-85 / Beatties Ford Road 13,984,624 340 1,141,347 7.3% (165,243) 0 0 $3.44

Iredell County 29,903,686 487 2,180,852 7.1% 235,369 0 313,000 $3.41

Gaston County 26,911,027 559 2,260,958 5.7% 276,000 0 0 $2.96

Catawba County 31,827,419 602 2,164,391 3.8% 346,904 0 0 $2.58

Cleveland County 15,776,360 179 645,677 4.9% 29,300 0 150,000 $2.55

Stanly County 4,351,259 103 333,461 5.0% 75,648 0 0 $1.98

CBD 648,550 33 20,250 2.3% 40,000 40,000 0 -

South 226,573 15 0 0.0% 0 0 0 -

Class A, B & C Submarket Statisticsand Submarket Specific Statistics

Notable Lease TransactionsBuilding Submarket SF Qtr Tenant Name

1 1500 Prodelin Dr Catawba County 187,200 1st -

2 587 Greenway Industrial Dr York County 121,767 1st Staples Commercial

3 Steele Creek 6 Southwest / 77 102,660 1st Fireside Hearth & Home

4 874 Paragon Way York County 88,848 1st -

5 Ridge Creek West III Southwest / 77 83,200 1st -

6 526 Woodlawn St Gaston County 65,000 1st Utility Partners of America

7 Gateway - Bldg II Southwest / 77 60,000 1st -

8 Northpark XVII North 41,600 1st -

9 3311 Beam Rd Tvyola Rd 40,000 1st -

10 1200 Tar Heel Rd* I-85 / Beatties Ford Rd 36,122 1st Maslo Co Inc

11 Brookwood IV Southwest / 77 25,600 1st -

12 Perimeter West - Bldg I Airport / West 24,987 1st -

13 Perimeter I North 24,605 1st -

14 Nations Ford Business Pk - Bldg II* Southwest / 77 24,054 1st Atlas Copco Inc

15 Gibson Mill Cabarrus County 20,000 1st -




Notable Lease TransactionsBuilding Submarket SF Qtr Tenant Name

16 Whitehall Technology Center II Southwest / 77 16,000 1st -

17 11301 Granite St Southwest / 77 13,201 1st The Life Center International

18 5100 Reagan Dr Sugar Creek 13,020 1st -

19 Shopton Ridge, 18-A Southwest / 77 12,800 1st Windy City Wire and Cable

20 3937 Corporation Cir I-85 / Beatties Ford Rd 12,290 1st -

21 1535 Center Park Dr Tyvola Rd 12,150 1st TiMotion

22 119 Spurgeon Brg Cleveland County 12,000 1st -

23 10350 Bailey Rd North 10,000 1st -

24 1846 Weinig St Iredell County 10,000 1st -

25 1846 Weinig St Iredell County 10,000 1st -

26 CLT Logistics Center - Building I Airport / West 8,654 1st -

27 7575 West Winds Blvd NW Cabarrus County 8,167 1st Osasis Alignment Services

28 Beltway Park at Union West Business Park Union County 8,000 1st Omni Elite Athletix

29 3204 Smith Farm Rd Union County 8,000 1st CEM Corporation

30 The Crossings @ Nations Ford E - E Blvd Southwest / 77 8,000 1st -

31 532 Patterson Ave Iredell County 7,895 1st -

32 9930 Industrial Dr Southwest / 77 7,500 1st -

33 3715 S Scott Futrell Dr Airport / West 7,320 1st -

34 Pinebrook I Southwest / 77 7,290 1st -

35 Pine Brook XI Southwest / 77 7,240 1st Med World Live

36 4901 Dwight Evans Rd Tyvola Rd 6,600 1st -

37 4901 Dwight Evans Rd Tyvola Rd 6,600 1st -

38 205 Quantz St York County 6,538 1st -

39 Whitehall Technology Park III Southwest / 77 6,447 1st -

40 3001 Chamber Dr Union County 6,000 1st -

Major Sales Transactions: 2016 through 1Q 2017Building(s)

Price SFPrice PSF

Seller Buyer

Lakemont West Business Park $63,000,000 969,633 $64.97 JP Morgan Investment Mgmt, Inc Hartz Mountain Industries, Inc

838 Lincoln County Pkwy $55,700,000 1,000,000 $55.70 Hartz Mountain Industries, Inc Stoneridge Realty & Investments

Carolina Beverage Group $14,900,000 155,417 $95.87 Carolina Beverage Group Columbus Nova MB, LLC

22 Pepsi Way $14,714,902 209,000 $70.41 The Keith Corporation Pepsi Bottling Ventures, LLC

10601 Westlake Drive $13,501,500 333,830 $40.44 L & J Schmier Mgmt & Investment AEGON USA Realty Advisors, Inc

6733 Craig Street $12,850,000 312,202 $41.16 Philip M Ramey Duke Energy Corporation

1001 Bond Street $12,200,000 404,351 $30.17 Global Logistic Properties, Ltd SilverCap Partners, LLC

The International Corporate Center $11,850,000 73,929 $160.29 J Portnoy Realty Albany Road Real Estate Partners

6301 Performance Drive SW $11,000,000 184,784 $59.53 Performance Drive Properties, LLC Haas Automation, Inc


* Renewal



Charlotte

Concord

Rock Hill

Monroe

Fairview

Huntersville

Mint Hill

Kannapolis

Unionville

Weddington

Indian Trail

Fort Mill

Matthews

Mooresville

Cornelius

Midland

Belmont

Lake Norman of Catawba

Waxhaw

Newport

Lake Wylie

Catawba

Stallings

Denver

Lesslie

Pineville

Maiden

Mount HollyHarrisburg

Wesley Chapel

Lowesville

Westport

Tega Cay

Mineral Springs

Marvin

Landis

Enochville

Dallas

Lowell

Davidson

Cramerton

India Hook

Stanley

Salisbury

Ranlo

Wingate

High Shoals

Faith

Iron Station

Granite Quarry

China Grove

Riverview

Hemby Bridge

Mount Pleasant

JAARS

McAdenville

77

85

8585

74

74

485

485

485

485

485

49

29

7429

29

85

85

7477

601

601

321

5211677

21

21

16

16

521

28 ± Mile Radius

277

85

77

77

77

2949

16

Mecklenburg County

Gaston County Cabarrus County

Union County

York County

Lincoln County

Rowan County

LancasterCounty

Iredell County

1

98

2

6

10

5

7

34

Industrial Submarkets

1 Southwest / I-772 Tyvola Rd3 I-277 / Remount Rd4 Airport / West5 I-85 / Beatties Ford Rd6 North7 Northeast / University8 Sugar Creek9 I-277 / 30th St10 Freedom Dr11 CBD12 East13 South

11

12

13





1Q 2017RETAIL Market Report

NAI Southern Real Estate4201 Congress StreetCharlot te, NC 28209

704-375-1000www.srenc.com

NAI Southern Real Estate-Charlotte, NC. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty, or representation about it. No part of this document is to be reproduced without our written permission. This document has been prepared and issued by NAI Southern Real Estate on the basis of publicly available information, internally developed data and other sources believed to be reliable. The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. NAI Southern Real Estate or its affiliates does not assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions provided herein. Any expressions of opinions are subject to change without notice. This document does not constitute an offer or an invitation to invest, lease, rent, purchase or conduct any real estate activity, business activity, or personal activity based upon its data or purpose. No party should treat any of the contents herein as advice.


Joe [email protected]

704-632-7618

Jay Vaughn, [email protected]

704-632-7627



1q’17 - srenc.com county 31,827,419 602 2,164,391 3.8% 346,904 0 0 $2.58 cleveland county...

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