South End office construction is absolutely on fire
South End office construction is absolutely on fire
Plus: Marcus Smith's wife banned from Twitter; Union leader threatens 'bloodiest, ugliest battle' with American Airlines; Nightclub nightmare at N.C. Music Factory
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South End office space is up 40% in 4 years — big gains for uptown, Ballantyne, SouthPark — and rents keep rising
Let’s talk about office space. No, not the 1999 Jennifer Aniston comedy. Rather, Charlotte office space.
We all know Charlotte is growing, big-time. And it’s not all apartments and condos. A lot of the growth is space for companies that are moving here or expanding. For the lowdown on trends in the Charlotte office market, the Ledger turned to Barry Fabyan, managing director of JLL, a real-estate services firm that leases office space. The company also collects a lot of data and produces quarterly market reports (not TPS reports).
Widespread growth: Pretty much the entire Charlotte office market is growing, and rents are rising. There are hardly any weak spots, Fabyan says: “We are blessed that across the board, the office market is healthy. Whether it’s uptown, South End, SouthPark, Ballantyne – you are seeing really strong lease momentum carrying forward, and rental rates are rising and supporting new construction.”
Uptown’s 18.7M square feet of office space accounts for about 36% of Charlotte’s total. (Source: Ledger analysis of JLL data.)
South End surging: JLL’s data show that in the last four years, the Midtown/South End area has led all other submarkets by adding 1.2M square feet of office space – a 40% increase: “It becomes the necessary piece in the puzzle for that area. They had restaurants and amenities, and now it’s becoming a workplace.”
News tidbit: The Square, an office building with ground-level retail on the corner of South Tryon Street and West Boulevard, was announced last year at eight stories. But Beacon Partners, which is developing the property, now says it will be 10 stories and have an extra 20,000 sq. ft. of office space, or 150,000 total. The City Council last week approved a rezoning for the site, currently home to Sauceman’s BBQ, which has said it is looking for a new location.
And uptown? Also surging. Want proof, beyond all the construction and big office towers?
As many as five large corporations are seeking space in Charlotte’s urban core, JLL says.
About 2/3 of all office space leased citywide in the 1Q was uptown.
Charlotte’s central business district has more office space under construction than those of almost every peer city, including Atlanta, Nashville, Austin, Houston and Denver.
In the last four years, uptown has added nearly 1 million square feet – and rents are up 31%.
Suburbs are growing, too: It’s tempting to think that the center city’s gain is suburbia’s loss – like the recent announcement that LendingTree is moving its HQ to South End. But data show suburban office markets growing, too: Ballantyne’s inventory rose 9% in the last four years. SouthPark’s increased 7%. “There is still great demand for well-done suburban office. As the millennials mature and have children, many people believe they will start to migrate a little bit farther south in our city. They are going to chase schools just like folks did in the past.”
The amount of office space in Midtown/South End is up 40% in the last four years, and most other areas of town continue to add inventory. (Source: Ledger analysis of JLL data.)
University area lagging but likely to grow: Office space in the university area has actually lost inventory in the last four years, and average rents are among the lowest in the city. But Fabyan says last year’s opening of the light rail line to UNC Charlotte could spur growth – like the office conversion beside the J.W. Clay Boulevard light rail station: “We think the direction, from NoDa out, is poised for development along the light rail with some office. Office development is starting in the NoDa and Sugar Creek stops and could be moving toward the university.”
Developers must appeal to choosier workers: In the old days, companies would select an office, and workers would dutifully follow. Today, though, potential employees are pickier about their workplaces and seek office space with some, uh, flair: “We are hearing all these stories about how a young worker today makes decisions before meeting the interviewer. It’s about where the office is located, the type of office, the type of lobby. Are they energy-conscious? Green-conscious? It used to be they’d go chase where the job was. Now they are making a more selective decision.”
Average asking rents for office space are surging even as supply increases. Midtown/South End’s average is up 36% in four years, followed by uptown, which is up 31%. (Source: JLL.)
Construction costs rising: All signs point to continued growth. But if there’s one hiccup, it’s construction costs. “The only pressure we are seeing is that the cost to do interior construction has grown significantly. Tenants are requesting upfits of their space. That is the pressure point of our deals right now. Every deal has to pause and get the numbers right.”
Seems like a lot of people are getting those numbers right around town nowadays.
NASCAR drama: CEO’s wife banned from Twitter
The wife of Speedway Motorsports CEO Marcus Smith says she has been suspended from Twitter for violating copyright rules.
Writing on her husband’s Twitter account on Monday night, Cassi Mitchell Smith said Twitter had gone through her account, @Gassigirl88, and found videos containing music. The service lists her account, which has more than 13,000 followers, as “suspended.” Social-media users generally cannot share copyrighted material, even for non-commercial uses, and Twitter’s policies say it will suspend repeat offenders.
“I have 100’s of tweets w/ music playing in the background. Call me naive, but I didn’t know it was wrong to play music & dance or film my dogs,” she wrote on Marcus Smith’s account. “… It would take alllloooootttttt of time for me to delete every video I ever made w/ music.”
Cher celebrated: In one of her final Twitter posts before the ban, Smith gave a birthday shout-out to Cher, who turned 73 last week: “You seem to be aging backwards...you’re beautiful! #IfICouldTurnBackTime” with a link to a video that is no longer available.
In a 2017 interview, she told Fox Sports that music is important in her life from the moment she wakes up at 5:30 a.m. each day: “It’s blaring, and I’m in the kitchen, sometimes on the island in the kitchen, dancing and singing,” and sometimes wearing roller skates. She said she and Marcus Smith are “very opposite personalities, but we complement each other. … He is very reserved, controlled, everything I’m not.”
Before the ban: The Smiths in an Instagram photo aired online by Fox Sports in 2017.
Marcus Smith, son of racing businessman Bruton Smith, earned $2.5M last year for his work as president and CEO of Speedway Motorsports. SMI announced plans last month to take the company private.
Union boss threatens American Airlines with ‘absolutely vicious strike action’
There was some tough talk last week from the head of one American’s mechanics’ unions, John Samuelsen. The president of the Transport Workers Union told off an American exec at a meeting in New York, according to a video posted by the travel publication TravelPulse:
“I stand here to tell you that you’re not going to get what you want,” the TWU president told [American Airlines president Robert] Isom. “If this erupts into the bloodiest, ugliest battle that the United States labor movement ever saw, that’s what’s going to happen. You’re already profitable enough.”
American made $3 billion in profit last year. …
Samuelsen said he is trying to avoid the airline imposing what is known as “self-help,” a situation where American could foist a new contract on the mechanics without their vote if the federal government allows it.
“If we ever get to a point where there’s self-help, we are going to engage in (an) absolutely vicious strike action against American Airlines to the likes of which you’ve never seen,” Samuelsen said. “Not organized by airline people, but organized by a guy that came out of the New York City subway system that’s well inclined to strike power, and who understands that the only way to challenge power is to aggressively take it to them. … We’re going to shut this place down.”
Isom responded:
“I will tell you this, that anybody that seeks to destroy American Airlines, that is not going to be productive. It just won’t. I’ll tell you what, the rhetoric that says we’re going to battle, we can’t live this way.”
These strongly worded tiffs are best understood as attempting to gain leverage in contract negotiations. Only rarely do they lead to the threatened outcomes. American, which this month accused mechanics of staging a slowdown that has led to delays and cancellations, is no stranger to hard-charging unions and should be able to figure out a way to placate a majority of its workers.
Nightclub meltdown at N.C. Music Factory
Online reviews slammed the N.C. Music Factory’s World Nightclub over the weekend, with patrons complaining that a Friday night show was marred by broken air conditioning, shortages of bottled water, overcrowding and people passing out and vomiting from the heat.
Hundreds showed up for a performance by Armin van Buuren, who is [checks internet] a Dutch DJ, record producer and remixer. But things quickly went south, according to 15 reviews on Google, seven one-star reviews on Yelp and two on Reddit. From a Yelp review from Chris. S. of Greenville, S.C.:
People were puking everywhere in VIP, dance floor and the bathrooms. 80 percent of the people stripped as much clothing as they felt comfortable, people passing out, workers with wet towels draped on their necks and heads and people dumping ice buckets from tables on each other.
When the artist gets on the microphone and apologizes and says it’s “F-ing ridiculous” you know there may be an issue, I dunno.
Jude H. of Charlotte wrote:
Our group was on the upper level. The General Admission pit was just packed with people. NO AIR CONDITIONING. THEY RAN OUT OF BOTTLED WATER. Some girl was on the upper level being iced down … She didn't look good at all. Thought she either just puked or was about to puke.
From Reddit:
I was in the madness in [general admission] and it was nuts down there. Tons of people smoking joints and blowing coke all night. Ended up leaving at like 1:30 because I couldn’t take the heat anymore. … Just a major sh-- show in there last night.
Jerrica Crescitelli told the Ledger she was there and that “it was a literal disaster. … People spent thousands on tables and left midway through.” She said fire trucks started arriving at 1 a.m.
Fyre Festival or fire-truck festival? The wild scene at World Nightclub at N.C. Music Factory on Friday night and early Saturday morning. (Video and photo courtesy of Jerrica Crescitelli.)
World Nightclub could not be reached for comment. The Charlotte Fire Department’s public information office did not return two phone calls and an email Tuesday.
In brief
JPMorgan’s Jamie Dimon blasts Wells: “Dimon calls Wells Fargo’s lack of CEO plan ‘irresponsible’” (American Banker). Wells announced Tuesday that it hired a technology exec away from Dimon’s bank.
Moth birth control: State agricultural officials will begin spraying pheromones in the Yadkin Valley wine region to prevent an infestation of gypsy moths. “The presence of the pheromone makes male gypsy moths unable to follow the natural pheromone scent trails released by the females. This decreases mating success.” (Observer)
Alexa watch with emotional intelligence: Amazon is developing a voice-activated wearable device that can sense human emotions. “The device has microphones paired with software that can discern the wearer’s emotional state from the sound of his or her voice. … The technology could be able to advise the wearer how to interact more effectively with others.” (Bloomberg)
No more chit-chat: “Uber Black launches Quiet Driver Mode” (TechCrunch)
Off the Clock
Low-key ideas for the weekend
Movies opening in Charlotte this weekend:
Rocketman (R) (88% on Rotten Tomatoes): Elton John musical biopic
Ma (R): Loner’s house terrorizes teens
Godzilla: King of the Monsters (PG-13): Monsters vie for supremacy
Always Be My Maybe (PG-13): Childhood sweethearts reconnect
Highly rated movies now playing:
Booksmart (97%)
Avengers: Endgame (PG-13) (95%)
John Wick 3 (R) (89%)
Long Shot (R) (81%)
Pokemon Detective Pikachu (PG) (66%)
Cheap getaways from CLT:
Yellowstone: Charlotte to Bozeman, Montana, $263 round-trip on United (one-stop), June 13-18.
Charlotte to Baltimore, $68 round-trip on Spirit (nonstop), various dates late June/early July.
Charlotte to Fort Lauderdale, $188 round-trip on Spirit (nonstop), various dates late June-September.
Charlotte to Los Angeles, $203 round-trip on United (one-stop), various dates in late August-November.
Charlotte to Prague, $600 round-trip on Lufthansa (one-stop), various dates in October-December.
Source: Google Flights. Fares retrieved Wednesday morning. They might have changed by the time you read this.
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The Charlotte Ledger is published by Tony Mecia, an award-winning former Charlotte Observer business reporter and editor. He lives in Charlotte with his wife and three children.