7/31/2019 CharlotteWEB AMERICAS MarketBeat Office 2page Q22012

1/2

Thalhimer1111 Metropolitan Ave., Suite 315

Charlotte, NC 28204www.cushmanwakefield.com/knowledge

The market terms and definitions in this report are based on NAIOP standards. No warranty orrepresentation, express or implied, is made to the accuracy or completeness of the information containedherein, and same is submitted subject to errors, omissions, change of price, rental or other conditions,withdrawal without notice, and to any special listing conditions imposed by our principals.

2012 Cushman & Wakefield, Inc. All rights reserved.

ECONOMIC OVERVIEW

Economic growth has clearly returned to the

Charlotte MSA, as evidenced by the recent

drop from 10.6% to 9.1% in the May year-over

year unemployment rate. The energy and

professional services sectors are experiencing

strong job growth, with financial services stabilizing and, in certain

business units, expanding. Local consumer spending indicators are

also trending up, further proof that local conditions are on the rise.

Although the market in general remains tenant-friendly, certain

submarkets such as the CBD, Highway 51, Midtown, and SouthPark

are flourishing. Space availability in these high-demand submarkets is

beginning to tighten and will soon lead to reduced lease concession

packages for tenants.

CONSTRUCTION SUMMARY

No notable construction commenced in the second quarter.

Ballantyne currently boasts the areas only significant projects under

construction, with two speculative ten-story office buildings that total

550,000 square feet (sf) in Ballantyne Corporate Park. In addition, a

new 240,000-sf build-to-suit for SPX is underway. All of these

projects are expected to be completed and delivered to the market

during the fourth quarter of 2012.

CAPITAL MARKETS SUMMARY

Capital Markets activity in Charlotte is booming. New ownership has

entered the market via Coliseum Centre (CarVal Investors and Vision

Equities), One Wells Fargo Center (Azrieli Group), and Fifth Third

Center (Parmenter Realty Partners). In addition, Parkway Properties

expanded their Charlotte portfolio with the $250 million purchase of

Hearst Tower. These transactions are an indication of the strong

interest buyers have in Charlotte, and additional activity is expected

for the remainder of 2012.

OUTLOOK

The core fundamentals for the region - climate, talent pool, affordable

housing, schools, and airport - remain attractive to potential

corporate relocation candidates.

Landlords in the CBD, Midtown, Highway 51, and SouthPark

submarkets should continue to benefit from improving conditions,

while the remaining submarkets will continue to keep rents depressed

in hopes of winning deals through economics.

STATS ON THE GO

Q2 2011 Q2 2012 Y-O-Y

CHANGE

12 MONTH

FORECAST

Overall Vacancy 15.4% 14.4% -1.0pp

Direct Asking Rents (psf/yr) $21.87 $22.91 4.8%

YTD Leasing Activity (sf) 820,492 1,494,272 82.1%

DIRECT RENTAL VS. VACANCY RATES

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

$16.00

$17.00

$18.00

$19.00

$20.00

$21.00

2008 2009 2010 2011 Q2 12

psf/yr

DIRECT GROSS RENTAL RATE DIRECT VACANCY RATE

LEASING ACTIVITY VS. OVERALL NET ABSORPTION

2.8

3.5

3.6

2.2

1.4

0.7

-0

.10.8 0

.5

0.5

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2008 2009 2010 2011 2012 YTD

msf

LEASING ACTIVITY OVERALL NET ABSORPTIONS

Q2 2012CHARLOTTE, NC

OFFICE SNAPSHOTMARKETBEAT

A Cushman & Wakefield Alliance Research Publication

7/31/2019 CharlotteWEB AMERICAS MarketBeat Office 2page Q22012

2/2

Thalhimer1111 Metropolitan Ave., Suite 315

Charlotte, NC 28204www.cushmanwakefield.com/knowledge

The market terms and definitions in this report are based on NAIOP standards. No warranty orrepresentation, express or implied, is made to the accuracy or completeness of the information containedherein, and same is submitted subject to errors, omissions, change of price, rental or other conditions,withdrawal without notice, and to any special listing conditions imposed by our principals.

2012 Cushman & Wakefield, Inc. All rights reserved.

CHARLOTTE, NC

SUBMARKET INVENTORY OVERALL

VACANCY

RATE

DIRECT

VACANCY

RATE

YTD LEASING

ACTIVITY

UNDER

CONSTRUCTION

YTD

CONSTRUCTION

COMPLETIONS

YTD DIRECT

NET ABSORPTION

YTD OVERALL

NET ABSORPTION

OVERALL WTD. AVG

ALL CLASSES GROSS

RENTAL RATE*

DIRECT WTD

AVG

CLASS A GROS

RENTAL RATE

Airport 10,425,662 20.6% 20.1% 201,599 0 0 3,470 (1,175) $16.02 $18.0

Alexander County 20,277 0.0% 0.0% 0 0 0 0 0 $0.00 $0.0

Anson County 17,009 0.0% 0.0% 0 0 0 0 0 $0.00 $0.0

Burke County 247,548 0.9% 0.9% 4,000 0 0 0 0 $13.52 $0.0

Cabarrus County 1,828348 16.5% 16.5% 17,305 0 44,657 221,848 223,798 $33.80 $49.7

Caldwell County 174,759 13.9% 13.9% 0 0 0 0 0 $23.17 $23.7

Catawba County 1,761,707 9.0% 9.0% 2,427 60,000 0 (450) (450) $11.53 $0.0

CBD 18,541,602 11.1% 11.9% 729,993 0 0 (302,548) (226,306) $22.74 $24.7

Cleveland County 542,189 3.9% 3.9% 0 0 0 1,000 1,000 $13.19 $0.00

Cotswold 241,835 16.3% 9.0% 7,208 0 0 4,920 4,920 $20.61 $21.5

Crown Point 1,637,297 18.3% 16.0% 15,544 0 0 (5,824) (5,824) $15.98 $21.5

East Charlotte 2,304,621 12.5% 12.5% 1,453 0 0 111,364 111,364 $13.14 $19.5

Gaston County 1,120,361 10.1% 10.1% 0 0 0 11,746 11,746 $11.98 $21.6

Highway 51 6,307,331 14.3% 14.0% 83,475 788,991 0 48,739 57,441 $22.53 $22.9

Iredell County 1,132,028 27.6% 27.1% 7,443 0 0 (20,693) (20,693) $16.82 $0.0

Lancaster County 741,629 24.0% 4% 38,308 0 0 1,090 (4,000) $11.40 $24.0

Lincoln County 184,600 6.9% 6.9% 0 0 12,485 0 0 $16.00 $0.0Midtown/Randolph Rd. 1,968,350 11.2% 9.6% 40,654 0 0 (5,457) (5,457) $22.49 $25.3

Midtown South End 3,216,559 8.7% 8.6% 31,971 0 0 (1,032) 644 $20.04 $25.4

North East/I-77 3,434,515 15.9% 15.1% 57,932 0 0 15,020 15,020 $18.55 $19.6

Northwest Charlotte 311,551 0% 0% 0 0 0 0 0 $0.00 $0.0

Park Road 1,129,846 20.5% 20.5% 13,594 0 0 (32,054) (29,502) $15.75 $25.5

Rowan County 196,725 2.2% 2.2% 0 0 0 (300) (300) $8.84 $0.0

Southpark 4,656,963 11.6% 11.4% 126,413 0 0 254,433 263,440 $21.64 $24.6

Stanley County 129,040 2.9% 2.9% 0 29,960 0 (3,750) (3,750) $13.95 $0.0

Union County 746,392 15.2% 15.2% 756 0 21,157 13,704 13,704 $23.40 $26.2

University 4,726,957 21.9% 21.9% 86,141 0 0 40,195 43,050 $19.63 $19.7

York County 2,678,049 5.4% 5.4.% 28,056 0 0 6,020 27,020 $15.24 $23.0

TOTALS 70,423,750 14.4% 13.7% 1,494,272 878,951 78,299 375,448 489,697 $19.43 $22.9

* RENTAL RATES REFLECT ASKING $PSF/YEAR

MARKET HIGHLIGHTS

Significant Q2 2012 Lease Transactions SUBMARKET TENANT BUILDING CLASS SQUARE FEE

Innovation Park University Wells Fargo B 120,00

LakePointe Corporate Center Airport Lash Group A 90,00

One LakePointe Plaza Airport Odyssey Logistics A 24,86

Significant Q2 2012 Sale Transactions SUBMARKET BUYER PURCHASE PRICE / $PSF SQUARE FEE

Hearst Tower CBD Parkway Properties $250M / $257.00 psf 970,00

Coliseum Centre Airport Vision Equities $103M / $105.11 psf 979,90

One Wells Fargo Center CBD Azrieli Group $245M / $248.65 psf 985,31

Significant Q2 2012 Construction Completions SUBMARKET MAJOR TENANT COMPLETION DATE SQUARE FEE

N/A

Significant Projects Under Construction SUBMARKET MAJOR TENANT COMPLETION DATE SQUARE FEE

Ballantyne Woodward Building Highway 51 Speculative Q4 2012 275,00

Ballantyne Gragg Building Highway 51 Speculative Q4 2012 275,00

Ballantyne SPX Building Highway 51 SPX Headquarters Q4 2012 238,99