Feb 25, 2024 - Business

Charlotte and the Triangle rank as some of the hottest markets for commercial investment

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Charlotte and the Triangle are among the most attractive markets in the nation when it comes to commercial real estate investment.

  • That's according to a new survey from CBRE, which ranked Raleigh/Durham and Charlotte No. 3 and No. 6, respectively. Dallas/Ft. Worth is atop the list for the third year in a row.

Why it matters: The findings underscore how property investors continue to flock to Sun Belt cities for a host of reasons, from job and population growth to weather — despite lingering post-pandemic economic challenges.

  • "The post-COVID environment has highlighted the importance of quality of life, elevating cities like Charlotte," said Patrick Gildea, a vice chairman with CBRE Capital Markets in Charlotte.

Between the lines: Consider real estate investor and developer Crescent Communities. The Charlotte-based firm's portfolio includes numerous properties across the Carolinas.

  • In the Triangle, Crescent is bullish on the life science sector, Brendan Pierce, Crescent's president of commercial, tells Axios. In Holly Springs, the firm owns a 150-acre life science campus with 2 million square feet of biomanufacturing, office, lab and retail space.
  • In Charlotte, Crescent is investing heavily in apartment-building construction, with properties from Montford to University City. The company is also developing a 1,400-acre mixed-use community here called The River District.

Zoom in: Crescent will continue increasing its investments in North Carolina, Pierce says, because of the state's business-friendly tax environment, weather, relatively affordable cost of living and population growth.

  • This mirrors a national trend: 60% of investors CBRE surveyed said they plan to expand their real estate portfolios in 2024, compared with just 16% last year.

What they're saying: If you're a large company looking to relocate or add a new location, Pierce said, "we've gotten to a point where North Carolina almost has to be on your list, especially if you want to be on the East Coast."

Yes, but: The biggest challenges for real estate investors this year nationwide are high interest rates, tight credit conditions, and differing buyer and seller expectations, per the CBRE survey.

Zoom out: Outside investors seem upbeat about the prospects for center cities in North Carolina's biggest markets. That's despite the fact that pandemic-induced work-from-home trends have been a drag on each city's office market.

  • The Missouri firm VeLa Development Partners, for instance, is developing high-rise apartment buildings in Uptown Charlotte and downtown Raleigh.
  • The two developments "will raise the bar on the urban residential experience" while offering a diversity of price points, according to Vela principal Nick Benjamin.
  • "Charlotte and Raleigh are both exceptional places to live and work and we believe the best is yet to come for the urban cores in these important cities," Benjamin says.
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