Economic Development - Expansions and Relocations

[Blue_Devil]

18 minutes ago, Hushpuppy321 said:

I agree with you - What I’ve seen is a massive hiring freeze throughout all sectors including Government (City/County).  I do think that the underlying economic strengths of the region are still in place but may not come back to full strength for several years (2 or 3) following this Pandemic.

I know banks like Wells and BoA are still hiring, but you are right, it is slower.

I do think Charlotte is goi g to reap a huge benefit of corporate relocations from this though, and we will see a lot of bigger banks move work force here too, on a faster pace then they were previously. 
 

The salary of hiring here in Charlotte or in Minnesota is about 30% less then hiring in NYC or CA and the employee has more purchasing power

[kermit]

On 4/23/2020 at 8:52 AM, CLT2014 said:

I think the big question: Will the jobs gained from re-locating firms make up for the job losses from firms already in the Charlotte market? Great, we get 500 new jobs from a company re-locating, but I doubt that will make up for a 40% reduction in job openings at BofA, WFC, Lowe's, Belk, Sealed Air, Ingersoll Rand, Electrolux, Coca Cola Consolidated, et... Will Belk even survive? Will the Better.com expansion to 1,000 people happen when the minimum FICO score for a mortgage is floating towards 680 - 700, reducing prospects? With the banks absorbing forbearance, when will they start hiring again and what will bonuses look like this year? Obviously it is better to gain some firms during a recession than gain zero, but I suspect we won't gain enough to make up for the layoffs and organic reduction in hiring throughout 2020.

My company has frozen all hiring through Q3 with C-suite sign off required for any position. We went from 150 job openings in Charlotte to 40. Department managers have been asked to find any and all opportunities to cut 25% of their budget. Since the company will be trying to make up ground all year from two lost quarters, hiring likely won't increase until 2021. Bank of America went from over 600 open positions to 191 now in Charlotte. Many firms are going to try to reduce expenses as much as possible throughout 2020 and hiring sprees are likely to slow down. 

Completely agree that Charlotte employment is going to decline and the local economy will suffer. But, I think the bigger question is how we appear to perform relative to other mid-size metros. If we manage to get through this with fewer net layoffs than Nashville or Atlanta (just examples), and no major public health disasters, then I think out-of-work skilled people elsewhere (including recent college grads) will see Charlotte as one of a few good options — and new firms will eventually follow the workers here. You could see this process at work in Dallas and Houston after 2009 where the oil industry was able to moderate Great-recession employment loss.

So far Charlotte has managed to avoid catastrophic job loss (thanks largely to airline stimulus), and our public health process has been going well. If we can stay on this road (and somehow avoid reinfection from the contaminated zombie hordes from SC, GA and TN) then I think Charlotte will emerge stronger than before. This will be doubly true if early reopenings in surrounding states create an image of mismanagement and incompetence and tourism-heavy economies in Atlanta and Nashville keep their unemployment rates relatively high.

Edited April 24, 2020 by kermit

[Blue_Devil]

1 hour ago, kermit said:

Completely agree that Charlotte employment is going to decline and the local economy will suffer. But, I think the bigger question is how much are we going to decline relative to other mid-size metros. If we manage to get through this with fewer net layoffs than Nashville or Atlanta (just examples), and no major public health disasters, then I think out-of-work skilled people elsewhere will see Charlotte as their best option — and new firms will eventually follow the workers here. You could see this process at work in Dallas and Houston after 2009 where the oil industry was able to moderate Great-recession employment loss.

So far Charlotte has managed to avoid catastrophic job loss (thanks largely to airline stimulus), and our public health process has been going well. If we can stay on this road (and somehow avoid reinfection from the contaminated zombie hordes from SC, GA and TN) then I think Charlotte will emerge stronger than before. This will be doubly true if early reopenings in surrounding states create an image of mismanagement and incompetence.

I mean banking is huge here, with at least 100,000 above average banking jobs, and little likelihood of lay-off in that industry. And then there are the support jobs related to banking here as well, though those are at higher risk, but major layoffs have not occurred yet.

it really helps the city is based around an industry deemed essential and that is fairly well prepared because of the 2008/09 crisis. Places like Nashville are going to be devastated as they are heavily tourism services.

[U_R_]

1 hour ago, Blue_Devil said:

Places like Nashville are going to be devastated as they are heavily tourism services.

Nashville does have a large healthcare presence which should continue to be strong.

I think Atlanta will be interesting to watch. It has a lot of industries negatively affected such as the convention business, travel (Delta, Travelport, airport), automotive (Cox, Asburry, Porsche and Mercedes), retail (Carters, Aarons), and restaurants (ChikfilA, Inspire Brands) while some of its other industries like fintech, healthcare, and paper, and logistics should weather the storm.

Edited April 23, 2020 by Ric0_0

[Prodev]

I work in retail real estate. It's been an obvious trend with our tenants that the larger ones (national chains) are the ones receiving funding from the PPP and I haven't seen a single retail/restaurant tenant that we have in our portfolio that's a single location operator that has received approval of PPP, while almost all of them have applied.  It's really unfortunate but not surprising. These larger ones have their lawyers all over it and have a direct line to their lenders, so naturally they're going to have an advantage against the sole proprietors who are attempting to navigate the process themselves and generally aren't sophisticated. I don't think it'll be much different in the next round of funding either. 

[Niner National]

9 minutes ago, Prodev said:

I work in retail real estate. It's been an obvious trend with our tenants that the larger ones (national chains) are the ones receiving funding from the PPP and I haven't seen a single retail/restaurant tenant that we have in our portfolio that's a single location operator that has received approval of PPP, while almost all of them have applied.  It's really unfortunate but not surprising. These larger ones have their lawyers all over it and have a direct line to their lenders, so naturally they're going to have an advantage against the sole proprietors who are attempting to navigate the process themselves and generally aren't sophisticated. I don't think it'll be much different in the next round of funding either. 

I was not approved in the first round. Doubt I will be this time either.

its a joke that businesses with 400-500 people are lumped in as small businesses with 5-10 person operations.

[kickazzz2000]

19 hours ago, Ric0_0 said:

Nashville does have a large healthcare presence which should continue to be strong.

I think Atlanta will be interesting to watch. It has a lot of industries negatively affected such as the convention business, travel (Delta, Travelport, airport), automotive (Cox, Asburry, Porsche and Mercedes), retail (Carters, Aarons), and restaurants (ChikfilA, Inspire Brands) while some of its other industries like fintech, healthcare, and paper, and logistics should weather the storm.

Good points re: Atlanta, however I’d posit that chick fila is doing just fine.  Lines are wild

[Guest]

19 hours ago, Ric0_0 said:

Nashville does have a large healthcare presence which should continue to be strong.

I think Atlanta will be interesting to watch. It has a lot of industries negatively affected such as the convention business, travel (Delta, Travelport, airport), automotive (Cox, Asburry, Porsche and Mercedes), retail (Carters, Aarons), and restaurants (ChikfilA, Inspire Brands) while some of its other industries like fintech, healthcare, and paper, and logistics should weather the storm.

I dunno, I know a lot of folks that have been laid off in healthcare, as backwards as that seems

Edited April 24, 2020 by Guest

[DH17]

On 4/24/2020 at 10:23 AM, Tyree Ricardo said:

I dunno, I know a lot of folks that have been laid off in healthcare, as backwards as that seems

My guess though is that bounces back very quickly. Sure, "non-essential" medical procedures have been postponed, but the latent demand in the population is still there, unlike certain types of retail/conventions/travel/etc.

[KJHburg]

well this is interesting from one of Charlotte's chief regional rivals that being Nashville.

Mayor of Nashville proposes 32% increase in property taxes due to the downturn (however their city was in fiscal woes before all this happened )

https://www.bizjournals.com/nashville/news/2020/04/28/cooper-enormous-32-tax-hike-needed-to-endure-covid.html

but I saw this on Nashville UP that 6 companies that received incentives have had them cut 50% in the proposed budget.   That fact will not sit well with economic recruiters and consultants as they don't like local governments going back on their agreements.     NC cities despite the woes right now are in much better shape as is our state.    This could be a competitive advantage for Charlotte and NC in general.  

Other economic tidbits that could benefit Charlotte are this that companies are looking for larger spaces for their employees.

From an article in the Triangle Biz Journal about office space and the virus.  

""He cited JLL's recent negotiations with "a well-capitalized technology company" in which the tenant was hoping to expand its space per employee by roughly 70%, to about 300 square feet from 175 today.""

My note:  as real estate is the 2nd biggest expense for tech and financial companies this is good trend.  If you need to increase the amount of office space going forward in a post pandemic world locations with cheaper office space are a good bet as long as you can find the workers. My predictions more NY based financial firms will look to open outposts in the Queen City and even tech companies as tech companies continue to open offices across the country to tap into different labor pools that are not as a competitive as NY or West coast markets.   I can assure you for example Credit Karma with offices in San Francisco and LA and Charlotte,  Charlotte is their by far cheapest place to operate.   It may be over the next 6-12 to 18 months but look for more expansions here.  

 

Edited April 28, 2020 by KJHburg

[QCxpat]

2 hours ago, KJHburg said:

well this is interesting from one of Charlotte's chief regional rivals that being Nashville.

Mayor of Nashville proposes 32% increase in property taxes due to the downturn (however their city was in fiscal woes before all this happened )

https://www.bizjournals.com/nashville/news/2020/04/28/cooper-enormous-32-tax-hike-needed-to-endure-covid.html

but I saw this on Nashville UP that 6 companies that received incentives have had them cut 50% in the proposed budget.   That fact will not sit well with economic recruiters and consultants as they don't like local governments going back on their agreements.     NC cities despite the woes right now are in much better shape as is our state.    This could be a competitive advantage for Charlotte and NC in general.  

Other economic tidbits that could benefit Charlotte are this that companies are looking for larger spaces for their employees.

From an article in the Triangle Biz Journal about office space and the virus.  

""He cited JLL's recent negotiations with "a well-capitalized technology company" in which the tenant was hoping to expand its space per employee by roughly 70%, to about 300 square feet from 175 today.""

My note:  as real estate is the 2nd biggest expense for tech and financial companies this is good trend.  If you need to increase the amount of office space going forward in a post pandemic world locations with cheaper office space are a good bet as long as you can find the workers. My predictions more NY based financial firms will look to open outposts in the Queen City and even tech companies as tech companies continue to open offices across the country to tap into different labor pools that are not as a competitive as NY or West coast markets.   I can assure you for example Credit Karma with offices in San Francisco and LA and Charlotte,  Charlotte is their by far cheapest place to operate.   It may be over the next 6-12 to 18 months but look for more expansions here.  

 

A story by Ashley Fahey in today's CBJ supports The KJ's - @KJHburg  prediction that Charlotte is going to get many 2nd HQ type announcements especially out of NYC.

Excerpt:  "There's also been talk around whether people and companies will become more adverse to dense cities and submarkets because of the crisis. The last expansion cycle was marked by a renaissance of downtowns and urban cores, with companies large and small opting to leave the suburbs for a CBD building."  "In fact, in Q1 of this year, 54% of "positive demand" was in the CBD, according to CBRE."  "The virus, which has disproportionately impacted major metros like New York City, has made some nervous about being in very dense cities that rely heavily on transit, where germs may be easily transmissible."  "Because of how long it might take for a place like New York to get back into the office, C-suite executives may be compelled to look elsewhere for their operations longer term, said Toby Jorgensen, senior research analyst at CBRE."

Link  - Subscriber paywall:  https://www.bizjournals.com/charlotte/news/2020/04/28/commercial-real-estate-execs-talk-covid-19-impact.html

[Blue_Devil]

9 hours ago, QCxpat said:

A story by Ashley Fahey in today's CBJ supports The KJ's - @KJHburg  prediction that Charlotte is going to get many 2nd HQ type announcements especially out of NYC.

Excerpt:  "There's also been talk around whether people and companies will become more adverse to dense cities and submarkets because of the crisis. The last expansion cycle was marked by a renaissance of downtowns and urban cores, with companies large and small opting to leave the suburbs for a CBD building."  "In fact, in Q1 of this year, 54% of "positive demand" was in the CBD, according to CBRE."  "The virus, which has disproportionately impacted major metros like New York City, has made some nervous about being in very dense cities that rely heavily on transit, where germs may be easily transmissible."  "Because of how long it might take for a place like New York to get back into the office, C-suite executives may be compelled to look elsewhere for their operations longer term, said Toby Jorgensen, senior research analyst at CBRE."

Link  - Subscriber paywall:  https://www.bizjournals.com/charlotte/news/2020/04/28/commercial-real-estate-execs-talk-covid-19-impact.html

Does that support Uptown or Ballantyne?

[KJHburg]

1 hour ago, Blue_Devil said:

Does that support Uptown or Ballantyne?

That is not sure now.  I think it means Charlotte itself will attract more businesses from densely populated cities and even uptown Charlotte is no where as dense as Manhattan not even by a long shot.  I think suburbuan mixed used developments like Waverly which has been successful in attracting office tenants bodes well for the new and improved ballantyne.    Southend is best of both worlds as it is somewhat urban and very walkable like uptown but also lower density than uptown.  

[SydneyCarton]

If escaping density is the new trend, traditional Alpha Cities and world financial centers like NY, London, Paris, Shanghai, Tokyo, etc. are doomed.  

I wonder if fifth-tier cities like Winston-Salem, Durham, Columbia, Columbus, Ohio, etc will boom.   Further, will new development in places like Charlotte and Atlanta go to less-dense office parks?  I hope not.  

Notwithstanding this possible trend, I still predict that JP Morgan Chase will build a 500,000 s.f. tower in Uptown.

 

 

Edited April 29, 2020 by SydneyCarton

[KJHburg]

From Cabarrus County EDC about recruiting new business right now and how it is going for those in the decision making process.

Featuring: Samantha Grass, Recruitment Project Manager at Cabarrus EDC

Q: How has COVID-19 impacted interest in Cabarrus County from businesses?

A: Regarding new business activity over the past 8 weeks, activity is still very strong. We were able to announce GoldenHome International in April and are actively working with three companies that will be making a location decision in the coming weeks. There are three additional projects as well that are very active that we are assisting on a weekly basis as they evaluate possible locations in Cabarrus County. Those projects were of course in the pipeline before the Covid-19 pandemic began in the US.

On average, we usually receive 10 new project requests each month. The number of new requests so far for the month of April is 4. I expect the number of new inquiries over the next few months will be down. Many of the requests that we have responded to over the last few weeks stated that company leaders hope to visit suitable properties as soon as it is safe to travel so location decisions will be pushed out until they are able to visit communities and tour properties.

Edited April 29, 2020 by KJHburg

[KJHburg]

46 minutes ago, SydneyCarton said:

If escaping density is the new trend, traditional Alpha Cities and world financial centers like NY, London, Paris, Shanghai, Tokyo, etc. are doomed.  There are thousand foot towers buried in this sea (which doesn't even show the east side of Midtown) that aren’t even perceptible.

I wonder if fifth-tier cities like Winston-Salem, Durham, Columbia, Columbus, Ohio, etc will boom.   Further, will new development in places like Charlotte and Atlanta go to less-dense office parks?  I hope not.  

Notwithstanding this possible trend, I still predict that JP Morgan Chase will build a 500,000 s.f. tower in Uptown.

 

I am not saying those huge financial centers are doomed but I am saying a lot more growth will have in the nations 2nd tier cities like Charlotte for many reasons like lower labor costs, cheaper office space,  more tele conferencing less reason to be face to face  etc.     This trend had already started and I think it will be accelerated by many other companies who have most of their eggs in one basket (or location).   

as for JP Morgan not sure about they coming to Charlotte in a big way.  They are HUGE in Dallas with a huge campus in Plano.  https://www.jpmorganchase.com/corporate/news/stories/new-world-class-campus-comes-to-dallas.htm    I do think Charlotte offers a better financial pool and they would be wise to look here but not sure with their investments in Dallas and I think also Columbus OH. 

[SydneyCarton]

4 minutes ago, KJHburg said:

I am not saying those huge financial centers are doomed but I am saying a lot more growth will have in the nations 2nd tier cities like Charlotte for many reasons like lower labor costs, cheaper office space,  more tele conferencing less reason to be face to face  etc.     This trend had already started and I think it will be accelerated by many other companies who have most of their eggs in one basket (or location).   

as for JP Morgan not sure about they coming to Charlotte in a big way.  They are HUGE in Dallas with a huge campus in Plano.  https://www.jpmorganchase.com/corporate/news/stories/new-world-class-campus-comes-to-dallas.htm    I do think Charlotte offers a better financial pool and they would be wise to look here but not sure with their investments in Dallas and I think also Columbus OH. 

I do a lot of work for JPMC, and I know that the have a lot of mortgage servicing operations in Columbus and Dallas, but I can see them expanding to Charlotte too.

[KJHburg]

2 minutes ago, SydneyCarton said:

I do a lot of work for JPMC, and I know that the have a lot of mortgage servicing operations in Columbus and Dallas, but I can see them expanding to Charlotte too.

Hey I hope you are right.  

[Matthew.Brendan]

Maybe they can ship down their old HQ and reconstruct it here

[KJHburg]

Beacon Properties just sold the building the lease with Corning is for another 14 years they are not moving anywhere just sending their rent check somewhere else.

Sold for $320 a sq ft.  and evidently they had multiple offers for the building.  

[KJHburg]

Here is an article on the Corning building sale that everyone can read and at the end it talks about how good the investment market is for Charlotte properties.  I mean $58.5 Million CASH now we are talking @Tyree Ricardo kinda of money.

https://www.cpexecutive.com/post/corning-opticals-charlotte-hq-sells-for-59m/

[TheOneRJ]

More speculation about Wells Fargo relocating to Charlotte. 

https://www.bizjournals.com/charlotte/news/2020/05/01/why-a-wells-fargo-headquarters-relocation-out-of-s.html?ana=wsoc

[CLT2014]

3 hours ago, TheOneRJ said:

More speculation about Wells Fargo relocating to Charlotte. 

https://www.bizjournals.com/charlotte/news/2020/05/01/why-a-wells-fargo-headquarters-relocation-out-of-s.html?ana=wsoc

Some of the articles / headlines media will run.. gah.. If this site selection consultant actually had any inside knowledge or was working with Wells Fargo, his lips would be sealed and he wouldn't be talking to the press. Instead, this article offers him (the only source quoted in the entire article), an opportunity to advertise his name and the merits of his business. It is essentially free advertising for Mr. Boyd to talk about the reasons companies relocate in general / boast of expertise, while not actually having any more inside knowledge of Wells Fargo than any of the rest of us. 

Next article might be "Breaking News: Real Estate agent quoted saying coronavirus outbreak is still the best time to buy and the top five reasons to use a Realtor."

Edited May 3, 2020 by CLT2014

[navigator319]

Could also be softening of the ground by WF. Strategic leaks to get the ball rolling so as to not be completely shock if they were to announce something is in a month or two.

[CLT2014]

2 minutes ago, navigator319 said:

Could also be softening of the ground by WF. Strategic leaks to get the ball rolling so as to not be completely shock if they were to announce something is in a month or two.

I could go with that. Good point.