Trends in Charlotte's medical office sector

Plus: Details on big office prospects Charlotte is courting; Is 110 East about to sign a large banking tenant? and more!

Today’s Real Estate Whispers is sponsored by The McIntosh Law Firm. At The McIntosh Law Firm, we offer experienced legal guidance in real estate development, property revaluation appeals, government relations, land use, estate planning, and business law—helping clients navigate complex legal and regulatory challenges.

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In today’s edition:

1. While the overall office sector remains sluggish, the medical office subsector is booming. We examine the trends in medical offices, from a Charlotte event last week that examined the topic.

2. The Charlotte Regional Business Alliance’s chief operating officer, Tracy Dodson, dished at Rotary this week about a handful of large office job prospects that are checking out Charlotte. She gave details on the types of companies, how much they would pay and the places they’re looking.

3. Is South End office tower 110 East about to hoist the logo of a bank on its building? We tell you what we’re hearing.

4. We round up real estate news from other reputable sources in our briefs section.

Let’s get to it!

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Population growth and policy shifts are prompting changes in Charlotte’s booming medical office market, panelists say

Panelists at last week’s healthcare conference hosted by Bisnow weigh in on changes in the medical office sector.

Charlotte’s office market, as we all know, has been tepid lately.

But one specialty subsector of office — medical office — is bucking the trend, with low vacancy rates and continuing construction.

“Certainly, growth around the region is prime right now,” said Patrick Faulkner, senior healthcare partner with the Keith Corp. “I think every new development that's going up — every housing development, every shopping center — has got a pad or a healthcare component.”

Faulker spoke last week at a healthcare real estate conference in Charlotte hosted by commercial real estate events company Bisnow.

The boom in the medical office sector is reflected in the data. While non-medical office buildings in Charlotte have a vacancy rate of more than 20%, medical office vacancy rates are below 6%, according to figures from real estate data company CoStar:

At last week’s Bisnow event, panelists said the outlook for medical office real estate in Charlotte remains strong, fueled by population growth, increased outpatient demand and continued investment interest. However, there is some uncertainty, too, around recent state and federal policy changes, financial pressures on health systems, rising costs and challenges delivering care in underserved areas.

Here are a few of the emerging trends identified by panelists: