Charlotte’s slumping office market sounds alarms
Vacancy rates rise as remote and hybrid work persists
Today’s Charlotte Ledger is sponsored by Moulin Rouge! The Musical | Blumenthal Performing Arts (blumenthalarts.org). Pop the champagne, MOULIN ROUGE! THE MUSICAL is the winner of 10 Tony Awards® — including Best Musical! Baz Luhrmann’s revolutionary film comes to life onstage, remixed in a new musical mash-up extravaganza.
This week in The Charlotte Ledger, we’re examining changes in the workplace in a series called “The Future of Work”: What will tomorrow’s workplaces look like? What can workers and employers do to prepare? You’re reading Part 2 of 4.
• TUESDAY: Younger workers crave mentoring. They don’t always get it.
• TODAY: Charlotte’s office market is struggling. ‘There’s going to be pain.’
• THURSDAY: The offices of the future will be packed with amenities
• FRIDAY: Small towns in N.C. are pushing to lure remote workers
‘There’s going to be pain,’ expert says as some uptown towers remain empty amid nation-leading delinquency rates.
By Hannah Lang
At Johnny Burrito, employees are in a predictable new routine.
For three days a week, things are just as they used to be: the Mexican joint in Two Wells Fargo serves a long line of lunch patrons some 40-people deep. Office workers wait to order in groups, chatting about the weather or the Panthers.
But Mondays and Fridays just aren’t quite the same, says owner Johnny Bitter. That’s when lunch crowds in Overstreet Mall dwindle. It’s clear to Bitter that these are the days many of his customers work from home — and his sales have taken a hit from what they used to be.
“I don’t see it being five days again,” he told The Ledger. “Not in the immediate future.”
It’s been a little more than two years since Charlotte’s largest companies started bringing employees in sectors like law, tech and finance back to in-person work. Many are now regularly at the office at least part of the time.
Workers are returning to uptown in greater numbers, according to recent reports based on cell phone location data, though still short of where it was before Covid in 2019.
But a shift away from the office appears to be permanent. In uptown, the office vacancy rate has more than doubled since 2019 and some towers sit mostly empty. Across the city, older buildings are struggling to find tenants.
It’s an unsettling trend that’s playing out in large and midsize cities across the country.
It also poses a threat to local economies: As commuters dwindle, so does business at local shops and restaurants. When office use declines, so do building values, and cities collect less in property tax revenues.
Some economists have warned of a so-called “urban doom loop” that could take hold: office vacancies rise, buildings empty, retailers shutter and the city itself starts to struggle.