Charotte Commercial Real Estate Whispers — May 8, 2024

Is there still a 'flight to quality'?; South End crane lawsuit; Proposed UDO changes panned; Land deals

Welcome to another tantalizing installment of Charlotte Commercial Real Estate Whispers, our occasional column that unveils the sultry secrets of building sales, rezonings and irresistible real estate intrigue just for you. Prepare to be seduced by the hottest insights, as the most forbidden secrets pique your professional curiosity.

We’re about to find out if there’s still a ‘flight to quality’ on Charlotte office towers; South End crane lawsuit; UDO change criticized; Land deals of note

◼️ ‘Flight to quality’ thesis is being put to the test

For the last couple of years, in a tough market for office real estate, the operating theory from the real estate industry has been that it is mostly a problem of older office buildings.

The thinking goes that the problem is concentrated in decades-old office towers, with high vacancy numbers and defaults, and that newer office buildings are attracting tenants just fine. This phenomenon has been termed a “flight to quality.” (It’s tough these days to get through a conversation with an office broker without hearing the term “flight to quality.”)

But is that actually true? We’re about to find out, in the form of Charlotte’s latest office tower, 110 East. No pressure, but how it fares could go a long way toward determining the appetite for future Charlotte office towers.