Charlotte economy...

[kermit]

In terms of things that have fallen off the radar, did I completely miss it or has the ACC HQ potential relocation gone quiet?

This was what SI said about the relocation in mid April:

Quote

Last week, the conference met to discuss the top three cities’ [Charlotte, Orlando and Greensboro] proposals. A vote to pick the new ACC headquarter city is reportedly expected to take place no later than the end of April.

https://www.si.com/college/2022/04/14/charlotte-orlando-acc-headquarters-finalists-greensboro-location

Here is a story of unknown reliability saying the commissioner expected to make a decision no later than mid June:

https://www.on3.com/news/jim-phillips-acc-expected-to-make-decision-on-relocating-headquarters-in-3-4-weeks-charlotte-north-carolina-orlando-florida/

I know these things have lots of moving parts, but I am guessing we hear something soon.

Edited June 28, 2022 by kermit

[jjwilli]

6 hours ago, kermit said:

 

In terms of things that have fallen off the radar, did I completely miss it or has the ACC HQ potential relocation gone quiet?

 

 

You ask, WRAL Sports answers. Looks like some behind the scenes movement with the NC Budget on the relocation. 

https://www.wralsportsfan.com/nc-earmarks-15m-to-put-acc-headquarters-in-charlotte/20352090/

[turbocraig]

And Senator Garrett has a few thoughts about it (and confirms it).  I imagine after all this being broadcast, an official announcement will come as soon as they pass this.  Assuming they do.

https://www.wfmynews2.com/article/news/local/15-million-dollars-move-acc-atlantic-coast-conference-headquarters-hq-out-leave-greensboro-charlotte-new-nc-north-carolina-proposed-budget-bill/83-9ead32e3-c2e7-4c87-92e6-1f671f93f3d2

Edited June 29, 2022 by turbocraig

[kayman]

11 hours ago, turbocraig said:

And Senator Garrett has a few thoughts about it (and confirms it).  I imagine after all this being broadcast, an official announcement will come as soon as they pass this.  Assuming they do.

https://www.wfmynews2.com/article/news/local/15-million-dollars-move-acc-atlantic-coast-conference-headquarters-hq-out-leave-greensboro-charlotte-new-nc-north-carolina-proposed-budget-bill/83-9ead32e3-c2e7-4c87-92e6-1f671f93f3d2

There are several forces at work in the state capital that will necessitate this deal.  The ACC has zeroed in Charlotte and Orlando. Charlotte is the assumed favorite because it's an in-state relocation. 

[CLT2014]

The ACC really did a great job dipping into public coffers for a 50 person office.... other than bragging rights (for the people that care?).... not sure this really adds to the economy much. 

Edited June 29, 2022 by CLT2014

[kermit]

6 hours ago, CLT2014 said:

The ACC really did a great job dipping into public coffers for a 50 person office.... other than bragging rights (for the people that care?).... not sure this really adds to the economy much. 

And an instate move to boot (it’s unusual that the state would incentivise that). Those four additional basketball tournaments are not nothing though.

Having said that there is a ton of history around the ACC that is relevant from a political perspective. There are lots of politically connected North Carolinians who would notice if the ACC left. From an economic sense it’s certainly possible that the conference system will be completely restructured over the next decade (and conferences are unlikely to meaningfully participate in NIL activities) so the office might be gone in 10 years, but it’s also possible the office will help grow  our sports media cluster.  

TLDR: there are worse things the state could have thrown its money at

Edited June 29, 2022 by kermit

[jthomas]

Yeah - as a Greensboro resident, it’s pretty galling to see the state kick in money for something the ACC seemed keen to do on its own anyway. I don’t think Orlando was ever a realistic option, but it served its purpose in enabling a $15M shakedown.

 

[KJHburg]

3 hours ago, jthomas said:

Yeah - as a Greensboro resident, it’s pretty galling to see the state kick in money for something the ACC seemed keen to do on its own anyway. I don’t think Orlando was ever a realistic option, but it served its purpose in enabling a $15M shakedown.

 

I thought that too about the $15 M but then I saw this and it is requiring a lot more ACC events in the state. 

From the Biz Journal:

""In order to receive the money, the conference would, by the conclusion of the 2032-33 academic year, have to:

Hold four men's collegiate basketball postseason championship tournaments in the state in addition to those already scheduled. At least two of the tournaments must be held in the city of Greensboro.
Hold four women's collegiate basketball postseason championship tournaments in addition to those already scheduled.
Hold four men's collegiate baseball postseason championship tournaments in addition to those already scheduled.
Hold 20 other collegiate postseason championship tournaments in North Carolina addition to those already scheduled or otherwise are already slated to be held in the state as a result of a set cycle of championship tournaments""

another thing it is noted that ACC might be looking at uptown Charlotte and Johnny Harris of Lincoln Harris might be ready to announce their location in his mystery tower at Legacy.  Think about it they could walk to their basketball, football and baseball tournaments and games. 

 

 

Edited June 29, 2022 by KJHburg

[jthomas]

17 hours ago, KJHburg said:

I thought that too about the $15 M but then I saw this and it is requiring a lot more ACC events in the state. 

From the Biz Journal:

""In order to receive the money, the conference would, by the conclusion of the 2032-33 academic year, have to:

Hold four men's collegiate basketball postseason championship tournaments in the state in addition to those already scheduled. At least two of the tournaments must be held in the city of Greensboro.
Hold four women's collegiate basketball postseason championship tournaments in addition to those already scheduled.
Hold four men's collegiate baseball postseason championship tournaments in addition to those already scheduled.
Hold 20 other collegiate postseason championship tournaments in North Carolina addition to those already scheduled or otherwise are already slated to be held in the state as a result of a set cycle of championship tournaments""

another thing it is noted that ACC might be looking at uptown Charlotte and Johnny Harris of Lincoln Harris might be ready to announce their location in his mystery tower at Legacy.  Think about it they could walk to their basketball, football and baseball tournaments and games. 

 

 

It's a meager consolation prize for Greensboro though - other than two men's basketball tournaments, the rest of those additional events could take place anywhere in NC. I just think it's a bad look for the state to give out incentives for an intrastate relocation. The ACC would have made the same decision with or without the $15M.

Also, this is Exhibit A to call BS on the next Republican who howls about limited government or fiscal restraint as a reason not to fund transit or other pro-urban policies.

[KJHburg]

15 minutes ago, jthomas said:

It's a meager consolation prize for Greensboro though - other than two men's basketball tournaments, the rest of those additional events could take place anywhere in NC. I just think it's a bad look for the state to give out incentives for an intrastate relocation. The ACC would have made the same decision with or without the $15M.

Also, this is Exhibit A to call BS on the next Republican who howls about limited government or fiscal restraint as a reason not to fund transit or other pro-urban policies.

Yes but this is state money and I dont like it but when I read about all the events they would require to be in NC it makes it better.  they support major golf tournaments and other big special events so there is that.  I don't think it was ever going to Orlando.     Why could not greensboro get the ACC baseball championship or the ACC golf tourney or at least the swimming championship?  Greensboro has a lot of venues that could support these championships and at least it requires them to be in NC.   Believe me here in Charlotte I would take the 1750 jobs with Toyota Battery or the 1500 plus jobs with Boom Supersonic any day over this 50 person office.  But this is a one off for this organization and wont be repeated. 

[jthomas]

5 minutes ago, KJHburg said:

Yes but this is state money and I dont like it but when I read about all the events they would require to be in NC it makes it better.  they support major golf tournaments and other big special events so there is that.  I don't think it was ever going to Orlando.     Why could not greensboro get the ACC baseball championship or the ACC golf tourney or at least the swimming championship?  Greensboro has a lot of venues that could support these championships and at least it requires them to be in NC.   Believe me here in Charlotte I would take the 1750 jobs with Toyota Battery or the 1500 plus jobs with Boom Supersonic any day over this 50 person office.  But this is a one off for this organization and wont be repeated. 

If the state's goal is to increase NC's share of hosting ACC championships, then they should directly subsidize those events through a tourism or special events fund. Tying this to an incentive for an intrastate corporate relocation is dubious, especially in the absence of a serious competitive bid. North Carolina (Greensboro included) is already a very competitive location for these events due to conference geography, venue quality, and local support. Many of these events would have likely gone to NC anyway without the provision in the law, because it is the best choice regardless of incentives.

Bottom line - the ACC got a $15M giveaway to make the decisions it would have made anyway. Good on them, but a bad look for the state government.

[Zeitgeist_4131]

5 hours ago, jthomas said:

If the state's goal is to increase NC's share of hosting ACC championships, then they should directly subsidize those events through a tourism or special events fund. Tying this to an incentive for an intrastate corporate relocation is dubious, especially in the absence of a serious competitive bid. North Carolina (Greensboro included) is already a very competitive location for these events due to conference geography, venue quality, and local support. Many of these events would have likely gone to NC anyway without the provision in the law, because it is the best choice regardless of incentives.

Bottom line - the ACC got a $15M giveaway to make the decisions it would have made anyway. Good on them, but a bad look for the state government.

Based on the news about USC/UCLA to the B1G, the long-term viability of the ACC seems less certain.

[eastsider]

3 hours ago, Zeitgeist_4131 said:

Based on the news about USC/UCLA to the B1G, the long-term viability of the ACC seems less certain.

Right, the state might want to hold off on handing out money for this. The Power 5 is gonna turn into the Power 2 rather quickly.

[CLT2014]

7 hours ago, eastsider said:

Right, the state might want to hold off on handing out money for this. The Power 5 is gonna turn into the Power 2 rather quickly.

While the Big Ten and SEC have been strengthening their conferences with new schools and rich media deals... the ACC has been flying around getting wined and dined worrying about where 50 people go into an office 3 days a week and how they can get taxpayer dollars to do so.

 

Edited July 1, 2022 by CLT2014

[KJHburg]

My notes from UNC Economic Forecast today at UNC Charlotte Economic Forecast 
It was the good, the bad and somewhat ugly news
Headlines and random notes:
Dr John Connaughton and chief economist from LPL Jeff Roach
Both economists think 50/50 chance of recession this year UNLESS bank contagion spreads then higher chances. 
NC recap in 2022
total employment growth 4.1% and total NET new jobs 190,300  average is 100,000
in 2023 they project 73.300 net new jobs

Inflation peaked at 9.1% now 6%  
Fed was 6-9 months late in dealing with inflation and played catch up (fastest rise in Interest rates in our lifetimes)
Believe both of them the recession will be shallow if there is one.  
Expect .25% rise in rates next weeks Federal Reserve meeting.  Both said if it is zero might think banking problems are more than we thought 
Rents will be pushed down by or at least growth of rent rates due to supply everywhere  CPI looks at rents and what is called the Owners  equivalent · rate which means what it would cost an owner of a home to rent but 65% of Americans own their own so this is a squishy number. Most peoples equivalent rent would be MUCH higher than their mortgage payments. .But this makes up CPI the inflation rate. 

Layoffs were for cost cutting now its seems to be because of reduced demand which is more problematic
Jeff compared the worlds economy to after WW2 out of balance and this is still happening.

Peak unemployment in NC could be 5% due to current unemployment being 3.9% now 
Plenty of signs of upcoming recession inverted yield curves but then other factors like low unemployment 

Both believe Fed will continue to fight inflation as they behind the curve started too late

On another note UNCC Belk College of Business has 36,000 alumni and 22,000 live in the metro Charlotte area

Believe NC GDP will grow 1.2% in 2023 vs end of year 2022 was at 2.4% 

Very mixed picture stay tuned to bank contagion, large layoffs, and job growth.  
 

[rancenc]

Charlotte gets a mention in this article from Reuters on the worldwide luxury goods market slowdown....and without the NC behind it!!

https://www.reuters.com/business/retail-consumer/why-china-could-become-luxury-industrys-next-sore-spot-2023-07-19/

[CLT2014]

7 minutes ago, rancenc said:

Charlotte gets a mention in this article from Reuters on the worldwide luxury goods market slowdown....and without the NC behind it!!

https://www.reuters.com/business/retail-consumer/why-china-could-become-luxury-industrys-next-sore-spot-2023-07-19/

We made it in the same sentence as famous Wuhan!!! #global

Edited July 19, 2023 by CLT2014

[rancenc]

Jobs coming to local manufacturing operations.

https://wraltechwire.com/2023/10/31/charlotte-based-celgard-to-add-new-jobs-boost-lithium-battery-separator-production/

[KJHburg]

This is from the Charlotte Ledger last week about the commercial real estate market including apartment development.  Two word summary  Major Slowdown!

""Charlotte’s commercial real estate industry looks poised to have its slowest year for new construction in the last few years, with declines in the number of new apartments as well as drops in square footage of new offices, retail and industrial buildings.

According to figures from real estate data provider CoStar, the Charlotte region is on pace in 2023 to start its fewest number of apartments since 2019, its smallest square footage of offices since 2014 and the least number of square feet of retail and restaurants in at least 10 years.

“We're seeing the combination of higher interest rates, tightening credit and moderating demand limit the appetite for new groundbreakings,” said Chuck McShane, director of market analytics in the Carolinas for CoStar.

 Multifamily: In the previous two years, there were a record number of apartments started. But this year, the number of starts dipped below 3,000 a quarter, or a dip from that pace by about 1/3. “The record levels of construction in multifamily over the past two years have begun to add a lot of competition among new units for tenants, which has led to declining rents, making it harder for new projects to pencil,” McShane said, using an industry term meaning that it’s tougher for projects to make financial sense.

 Office: Office construction nearly ground to a halt in the second quarter of this year. It increased in the third quarter this year — mostly because of the offices at the Plaza-Midwood development Commonwealth, which The Ledger explored last month — but the sector remains off its longer-term pace as hybrid and work-from-home arrangements continue to pose challenges. “New office construction is starting to look like retail did during the Great Recession — not much is going to get built without strong preleasing,” McShane said.

 Retail: New retail construction has had consistently strong years over the last decade. This year, for the first time, the Charlotte area had back-to-back quarters of fewer than 100,000 s.f. of new retail, CoStar data shows. 

Industrial:  

The industrial segment has been a consistently bright spot in the last few years, as companies have increased their logistics and warehousing operations to meet increased delivery demand. In the 3Q of this year, though, construction of new industrial space was just 412,000 s.f. in the Charlotte region, the slowest quarter since 2015. John Culbertson of Cardinal Real Estate Partners, a commercial real estate advisory company, says “the large occupiers of space are satisfied for the time being,” though there’s still activity in smaller buildings.""

[KJHburg]

I will put this here from JLL about office vacancies in Charlotte and other major SE markets.  YTD is all of 2023.  

Fundamentals Forecast YTD net absorption -540,272 s.f. ► Total vacancy 22.0% ► Class A direct asking rent $37.46 p.s.f. ► Overall direct asking rent $34.72 p.s.f. ► Concessions Stable ► Under construction 935,000 s.f.     CHARLOTTE

Fundamentals Forecast YTD net absorption 192,305 s.f. ▼ Total vacancy 21.1% ▲ Class A direct asking rent $44.55 p.s.f. ► Overall direct asking rent $40.15 p.s.f. ► Concessions Stable ► Under construction 2,016,467 s.f.   NASHVILLE 

Fundamentals Forecast YTD net absorption -530,889 s.f. ► Total vacancy 16.7% ▲ Class A direct asking rent $34.06 p.s.f. ► Overall direct asking rent $32.51 p.s.f. ► Concessions Rising ▲ Under construction 1,181,204 s.f.   RALEIGH DURHAM 

Fundamentals Forecast YTD net absorption -4,369,746 s.f. ▼ Total vacancy 23.9% ▲ Class A direct asking rent $35.88 p.s.f. ▲ Overall direct asking rent $33.42 p.s.f. ► Concessions Rising ▲ Under construction 2,436,380 s.f.   ATLANTA 

Fundamentals Forecast YTD net absorption -270,796 s.f. ▲ Total vacancy 16.9% ▼ Class A direct asking rent $34.36 p.s.f. ▲ Overall direct asking rent $30.98 p.s.f. ▲ Concessions Rising ▲ Under construction 418,928 s.f.  TAMPA ST PETE

All from JLL reports and it notes on the Charlotte report that the 770,000 sq ft Centene campus is not included as it is for sale only not for lease.  Otherwise our vacancy would be higher.   It also mentions sublease space is tapering off in Charlotte and not a big part of the market like in tech heavy markets like Raleigh Durham, Austin etc.    So Charlotte is not the worse performing office market but no means the best amongst these competitors.  

I have underlined the best performers and bolded the worst.  

[KJHburg]

Now in the warehouse and industrial market Charlotte metro is en fuego.  Imagine if just half this net absorption for warehouse/maunfacturing  space was office space.  There would be towers going up all over the city.

Fundamentals Forecast YTD net absorption 8,096,459 s.f. ▶ Under construction 11,981,811 s.f. ▼ Pre-leased 14.6% ▶ YTD deliveries 14,719,101 s.f. ▲ Total vacancy 4.6% ▲ Total availability 8.6% ▲ Average asking rent $7.48 p.s.f. ▲ Concessions Stable ▶   CHARLOTTE 

Fundamentals Forecast YTD net absorption 5,178,089 s.f. ▼ Under construction 5,596,901 s.f. ▼ Pre-leased 61.5% ▲ YTD deliveries 7,838,779 s.f. ▲ Total vacancy 4.7% ▶ Average asking rent $7.74 p.s.f. ▶ Concessions Flat   NASHVILLE 

[KJHburg]

Here is the Cushman and Wakefield office market report.  You can read the details about the Charlotte office market where 24% of the Charlotte office vacancy is in 10 buildings in uptown!

Charlotte MarketBeats | United States | Cushman & Wakefield (cushmanwakefield.com)

they are predicting no new office starts in the next quarter or two which of course delays in any future new office space.  

[KJHburg]

4th quarter 2023 economic growth in NC where jobs are growing the faster etc and what kind of jobs are being created.  

North Carolina Economic Report 2023 4Q- DMJPS CPAs + Advisors

[rancenc]

Positive news on the tourism industry front in Mecklenburg County.

https://www.wcnc.com/article/news/local/uptown-firstward-fourthward/charlotte-tourism-industry-hospitality-city-council/275-ec9d00ef-2409-4a66-b75d-95567f476c62

[kayman]

18 hours ago, rancenc said:

Positive news on the tourism industry front in Mecklenburg County.

https://www.wcnc.com/article/news/local/uptown-firstward-fourthward/charlotte-tourism-industry-hospitality-city-council/275-ec9d00ef-2409-4a66-b75d-95567f476c62

I've always said Charlotte historically underinvested in its regional tourism industry for a major city with a major hub airport in the top 10.  It's good to have business tourism but it is great to have  business,  sports,  and leisurely tourism. Charlotte must continue to capitalize and invest in all three. It will pay off as we must continue to make Charlotte the hub of both Carolinas for tourism on all fronts.

Edited April 4 by kayman