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Market Report

Charlotte Office Market Report

2024 Investment Forecast

Tenants Increasingly Favor Smaller, Higher-Quality Space;
Medical Office Demand Still Robust

Health care segment props up overall office landscape. Aided by above-average household growth, medical office vacancy held at a level that more-than halved the traditional office sector’s rate last year. The divergence may grow further, following North Carolina’s recent Medicaid expansion. Starting last December, an additional 600,000 residents have gained access to federal health care, supporting a higher level of visitations to providers, and consequently, greater tenant demand for medical spaces in Charlotte. For more traditional offices, however, users’ needs are being driven by a strong preference for more centrally-located, newer-built options. As of the start of this year, nearly all planned move-ins were for buildings in the CBD, Midtown or Southend that were completed after 2014. New leases of this nature include those from law firms Robinson Bradshaw and Katten Muchin Rosenman, as well as engineering companies Honeywell and Palmetto Solar. While some tenants are expanding their overall footprints in Charlotte, many are downsizing to make up for the cost of leasing a higher-quality office. As several operators are left with large blocks of vacant space in the process, asking rates will fall on average through 2024.

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