Looking Good
Oct 1, 2006 12:00 PM
The Charlotte, N.C. retail real estate market will have a stable year in 2006, says the National Retail Research Report from the Marcus & Millichap Real Estate Investment Brokerage Company. The Report estimates that Charlotte companies will hire 18,000 new workers this year, representing a 2.2 percent increase in the area's current employment rate.
The influx of new jobs, however, will be tempered by a sizeable addition to the local product inventory — 2.3 million square feet of new retail space will be completed in Charlotte this year, a 200,000-square-foot increase over last year's construction pipeline. As a result, there will be only a 30-basis-point drop in vacancy rates to 8.9 percent.
The good news is that rents will increase 2.3 percent to $17.08 per square foot and investors are expected to show continued interest in local properties — the median price for multi-tenant retail buildings in Charlotte is currently at $95.22 per square foot, an increase of 1.3 percent over last year's numbers.
“Despite a high level of new construction, demand is keeping pace as retailers look to expand in the market,” says Gary R. Lucas, managing director of Marcus & Millichap and regional manager of the firm's Charlotte office. “Vacancy and rents will show modest improvements in 2006, and investors will continue to compete for quality properties.”
The Charlotte market ranked as No. 35 on Marcus & Millichap's National Retail Index this year, moving three places ahead from 2005 in the analysis of 42 markets around the country.
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