Feb 2, 2023 - Development

No, Charlotte’s not done building apartments — or offices or hotels, for that matter

More than $6.9 billion in apartments, offices and other construction projects is in the pipeline for Uptown and South End.

  • That number includes 7,700 planned apartments — 2,600 that are under construction and 5,100 that have been announced.
  • It also comprises 7.2 million square feet of office space. Work on 1.9 million square feet is underway.

Why it matters: This is good news for Charlotte, if you ask Center City Partners. The organization has compiled the data into its annual “State of Center City” report.

  • “We’re bullish on what this means,” CCCP president and CEO Michael Smith tells Axios. “There’s definitely some headwinds coming with potential recession. But the beauty of this kind of data is it looks beyond a[n economic] cycle to see what’s possible and where our community’s going.”
  • Charlotte ranks among the top 10 fastest-growing metros.

Flashback: CCCP’s 2022 report referenced $4 billion worth of development projects that had either been publicized in the news or were under construction.

What they’re saying: Sometimes Charlotteans shake their heads at more apartment buildings or scoff at another brewery set to open. So, I asked Smith why he thinks this growth is a positive sign for the city.

  • “Creating a place that is attractive to new people deciding to move here means it’s an attractive place for the people who live here,” he tells Axios. “Places either grow or die. Nothing stands still. You’re either becoming more relevant to the world or less relevant.”

“Charlotte chooses more relevant. … Instead of having our talent move to other cities, we want other cities’ talent moving here.”

  • CCCP sees center city as the “economic development engine” for the region.

Yes, but: That means the city must be intentional about how it grows— including how to improve mass transit and access to affordable housing to maintain a diverse population.

Here’s a closer look at what’s being built, how much and why.

Office space

The pandemic and remote work changed the way we think about offices, but it didn’t stop developers from building them.

  • “Companies firmly believe there’s a competitive advantage with people coming together,” says James LaBar, CCCP’s senior vice president of economic development.
  • He adds that some companies want more space to spread out and collaborate instead of having traditional assigned seats. Other employers may prefer a smaller footprint but more technological connectivity.

Last decade, 7.7 million square feet of office was built in Charlotte. The 7.2 million square feet that is planned would nearly double that.

  • “When a company’s thinking about moving here and creating new jobs, they’re not going to wait three years to build a building,” Smith said. “They want space they can move into. We got to keep building new office space to be able to get more jobs to come here.”

Charlotte has more than 20 million square feet of office space considered Class A, an amenity-driven industry standard. In that regard, it is outpacing peer cities like Tampa (5+ million square feet of Class A office space) and Raleigh (5 million).

  • “You would think that downtown Atlanta would have a lot more than us,” Smith said. “Not the case. And yet, you look at rent rates, and they’re all pretty similar, pretty competitive.”
  • Charlotte’s average direct asking rent per square foot is $38, compared to $30 for Atlanta.

People are working from Uptown and South End at levels roughly 70% of pre-pandemic times, and about half of work arrangements are hybrid, according to Center City Partners’ data.

Housing

The average Charlotte home is selling for $369,800 after 33 days on the market, according to CCCP’s report. The average renter, per CCCP, is paying $1,700 in the city of Charlotte or $1,860 for a unit in center city specifically.

  • Charlotte Center City Partners considers the current housing market as in a balanced position. That’s a positive sign for companies that want to ensure talent recruits can afford a home.
  • Zillow recently labeled Charlotte as the hottest housing market in 2023, but LaBar cautions it’s not “overheated.”
  • “It’s relatively affordable compared to other markets where the job creation number is really high,” LaBar says. But if you want to sell, there are willing buyers, he adds.

Yes, but: Charlotte is short about 23,000 affordable housing units to house low-income residents, according to a 2021 UNC Charlotte report.

Hotels

Tourism in Uptown exceeded pre-pandemic levels in 2022. CCCP’s report shows there is a direct correlation between people coming to Uptown and the activation of Bank of America Stadium, which upped its slate of events this year.

  • Sixteen of the city’s top 20 days on record for number to visits to Uptown were last year.
  • Among the standout events were the ACC Championship Game (with 232,000 visitors to Uptown that day), Garth Brooks (222,000 visits the day of his first performance) and Kenny Chesney (208,000).

Three hotel projects are currently under construction or planned in center city. They will deliver more than 670 rooms in the coming years. These include a 13-story Marriott, a 13-story Hilton and a 257-room InterContinental connected to the restored Carolina Theatre.

  • Developers have announced plans for a total of 1,340 more hotel rooms. In the last decade, Charlotte saw 1,800 hotel rooms built.

What else we’re watching: By the end of 2023, visions for three major properties in and around the center city should become clearer.

  • The Iron District: Charlotte Pipe and Foundry is relocating from this 55-acre site and has rezoned it for dense, mixed-use development, making it more marketable to potential developers.
  • The North Tryon District: Levine Properties, Mecklenburg County and other property owners control 50 acres of land here. CCCP has dubbed the area the “most exciting development opportunity remaining in Uptown.”
  • The Pearl: This is the future site of a four-year Wake Forest University medical school, offices, lab, retail, residences, community spaces and businesses.

By the numbers:

  • 68,000+: People living in center city. (Last year’s report: 67,000+)
  • 29: Median age of South End residents. Last year it was 28. (They grow up so fast.)
  • Nine: Craft breweries in South End (“Great economic development generators,” says LaBar.)
  • 39: Events hosted at Bank of America Stadium in 2022, nearly triple the number of events in 2017. (And that number will “absolutely” go up, Smith says.)
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