Real Estate Analysis In The Charlotte Area For First Quarter
Industrial Real Estate Market Analysis in Charlotte
Industrial Real Estate Market Analysis: Q1 2024
Absorption Figures and Leasing Activity:
Wavering market conditions impacted absorption figures in Charlotte’s industrial real estate sector for Q1. Despite challenges, the quarter ended with approximately 305,000 square feet of occupancy gains, driven primarily by newly constructed build-to-suit (BTS) projects. However, notable tenant move-outs, including Arrival and Premium Beverage, offset some of these gains. Demand remained strong, with new leasing activity increasing by nearly 20.0% year over year (YOY), reaching 1.4 million square feet (msf). The majority of new leasing occurred in smaller spaces, with urban core submarkets in Mecklenburg County dominating activity.
Renewal Activity and Rental Rates:
Renewal activity experienced a significant uptick, surpassing the annual total of the previous year in just one quarter. This increase was partly driven by large renewals like Exel’s nearly 950,000-square-foot deal. Rental rates continued to rise, reaching a historical high average of $7.62 per square foot (psf) overall. However, economic headwinds began to moderate quarter-over-quarter (QOQ) increases. Moving forward, rental rate increases are expected to align more closely with pre-pandemic averages.
Investments:
Q1 saw five notable industrial sales transactions in Charlotte, totaling nearly $204 million in volume. Significant sales included Equus’s acquisition of the Lincoln Commerce Center Industrial Park, Welcome Group’s purchase of Westinghouse 85, and IFAB Corporation’s expansion with the acquisition of a manufacturing facility. These transactions indicate ongoing investment interest in Charlotte’s industrial real estate market.
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