NASCAR Plaza at the Hall of Fame

[monsoon]

....., but I don't think anything has changed much.

Except that the false economy that much of this was counting on has evaporated into thin air. It's also not clear if NASCAR had intended to vacate other office space in the city so the net utilization won't be anywhere close to this. I fully believe this tower will be finished because of the city playing shell games with money. Whether they actually rent it out or not is quite another matter.

[atlrvr]

It's difficult to explain the legal situation involved with the tower, but ultimately yes, it might get foreclosed on because of disputed cost overruns, and the lack of financing available right now (considering Lauth them selves is illiquid). It's likely some sort of white knight will pony up the equity, and the developers will get forced into a vastly less profitable role, but that's purely speculating.

It's a speculative tower in the sense that only NASCAR corporate signed a lease for about 25% of the space before construction began......so, semi-speculative?

The offices moving in are currently in 1 Wachovia (I think) and I believe maybe up in Huntersville as well. They haven't publically announced if any corporate functions are relocating from the Daytona Beach HQ.

[monsoon]

.......It's a speculative tower in the sense that only NASCAR corporate signed a lease for about 25% of the space before construction began......so, semi-speculative?......

Then this news doesn't bode well for the company holding the note on this office tower. A 75% un-leased building, if this is indeed the case, probably is going to have more issues than even 210 Trade. (And the raging river of money from the banks was still flowing when 210 Trade technically stopped.)

[rockhilljames]

That's really comparing apples to oranges. 210 is part of a complicated boon-doggle of odd financing and poorly executed due diligence where city zoning is concerned. The NASCAR tower is (as noted) a semi-speculative office tower. The only comparable space in the city that I can think of at the moment is the office component of Novare's project, which seems to be doing well. Obviously in this economy, and with the major office tenants in downtown currently downsizing now is not the time to be coming on-line with new space. However, given the relatively low office vacancy rate and lack of new space in the works I don't think this project will have a problem finding an owner if the project does happen to go into foreclosure.

[monsoon]

.... However, given the relatively low office vacancy rate .....

Last month the downtown office vacancy rate rose to 10.5%. This does not count government downsizings and other spots being vacated but which are not going up for lease. (yet_ There is of course the 48 story Wachovia tower coming on-line. Furthermore, some companies are leaving downtown to take on cheaper new office space in the suburbs which are competing against downtown on price. IMO, the problem is worse than what is being reported.

[atlrvr]

10.5% downtown? Source? I don't doubt it could eventually get to that once the towers under construction are opened and the recession finally bottoms out, but we are a long way from that % right now.

I also haven't heard of any significant companies moving to the burbs, as opposed, to say GMAC which is moving from Ballantyne to downtown. The logic works the opposite way....downtown is now a relative bargain, so its a good time to get a better location for a deal.

In regards to the NASCAR tower, I don't have access to the financial information or pro formas, but most office towers give themselves ~2 years after opening to lease-up. I'm sure there are concerns, but not panic mode yet, at least not from a leasing perspective. The building is a bit off the beaten path, but on the plus it does have more parking than a lot of other buildings.....who knows what will happen, I sure don't.

[SmellyCat]

10.5% downtown? Source? I don't doubt it could eventually get to that once the towers under construction are opened and the recession finally bottoms out, but we are a long way from that % right now.

Yeah I don't think that's an accurate figure. I've heard 10-12% thrown around as what the vacancy rate COULD eventually grow to, but that assumes all the space that could come online does so and is zero absorption.

To put this in perspective, there are plenty of cities that would kill for a vacancy rate as low as 10-12%, such as Chicago, Houston and Dallas to name a few, which perpetually have vacancy rates approaching or exceeding 20% even during good times. 10% is probably a pretty good natural vacancy rate to have, because it allows for companies looking to relocate to find decent sized blocks of space (such as GMAC) to do so without having to consider building something. The 1-2% vacancy in Uptown was too low of a run rate for this reason.

[monsoon]

10.5% downtown? Source? I don't doubt it could eventually get to that once the towers under construction are opened and the recession finally bottoms out, but we are a long way from that % right now.

According to Bob Morgan of the Charlotte Chamber of Commerce and Hugh McColl, it is already there. I have two sources.

• Last week Business week did an article on downtown office space in general at a national level Charlotte was mentioned. "The abrupt downturn in commercial real estate is punishing cities as varied as Detroit, Dallas, and Hartford, where downtown office vacancy rates top 20%. Unoccupied space is piling up quickly in San Antonio, Las Vegas, Charlotte, and San Jose." This source.
  
• On the actual number, the 10.5% comes from Bob Morgan (the president of the CCoC) and Hugh McColl who have started a new campaign that talks about how attractive downtown has become from companies because of the increasing vacancy rate. Morgan does say he expects the rate to hit 12%. (I think he is being optimistic) The actual article is on the BJ paid for site. However you can look at this televised article of Morgan who back in February said it was 10%. This link.
  

Remember it is these guys job to put a happy face on Charlotte. I suspect the problem is much worse than the 10% - 12% numbers they are throwing around.

As I posted in another topic, Pro-Build Holdings has announced it is closing its West Trade office and moving it to Atlanta. And in looking up that stuff again, I discovered that another company, don't remember the name, announced it is was canceling it's lease for space in the HOF.

[49er]

That's a good amount of vacancy to have. Back before 9/11, the vacancy rate downtown was extremely low too, around 1.5 or 2%. It's tough to recruit companies when you have to put together a deal that involves unbuilt space in a new tower. It's sort of like buying a house or condo as a presale verses something you can actually walk through. With all the new space coming online, I would suspect a good 3-5 year drought on new office tower construction, maybe more. I also think the rate could temporarily spike much higher than 12%. No one knows what Wells Fargo really has up its sleeve. For the record, govt space isn't typically included in the office vacancy rate stats.

[HopHead]

"Problem" doesn't equal 10-15% in my opinion... "Problem" equals 30-40% or higher... As others have said, you need ample empty office inventory to recruit new companies. With all the new office space coming online in the next year yea, it's going to be higher. That's expected. If years go by and all that new space becomes unfilled, then it's a problem.

Now, back on the topic of the actual Hall of Fame. I read recently that "May 2010" is the intended open date for the Hall of Fame. Wasn't it orginally March 2010? I would imagine they want it done and ready to open prior to next year's all-star race.

[TONYCLT]

I remember reading somewhere that the hall of fame inductions were to be around the same time as the 2010 all-star race.

[uptownliving]

According to Bob Morgan of the Charlotte Chamber of Commerce and Hugh McColl, it is already there. I have two sources.

• On the actual number, the 10.5% comes from Bob Morgan (the president of the CCoC) and Hugh McColl who have started a new campaign that talks about how attractive downtown has become from companies because of the increasing vacancy rate. Morgan does say he expects the rate to hit 12%. (I think he is being optimistic) The actual article is on the BJ paid for site. However you can look at this televised article of Morgan who back in February said it was 10%. This link.
  

I watched that Fox Business News story you linked and in it Bob Morgan says that he expects the vacancy rate to hit 10% around Feb 2010....not today and not back in Feb 2009. Got another source?

All of the business leaders in Charlotte have been pretty consistent in saying they expect the vacancy rate to hit 10% in the next year.

[Spartan]

A good source for office vacancy rates is Colliers Pinkard. They have reports for most MSA's over 500k. According to this group, the overall office vacancy rate in Charlotte is 12% in the 1st Quarter of 2009. The vacancy rate within the Uptown submarket is 2.4%. They also suggest that the uptown vacancy rate will trend upward to about 13% by next year due to the new buildings coming online and banking consolidations.

[monsoon]

I watched that Fox Business News story you linked and in it Bob Morgan says that he expects the vacancy rate to hit 10% around Feb 2010....not today and not back in Feb 2009. Got another source?.....

Indeed I do. I said in the post above I saw it on a site that you have to pay for now. However Morgan has since revised his estimate to 12% by the end of this year. This means he added another 2% in just the last 3 months. See this story. I posted those links in response to the claim that it would be no where near 10%. Obviously that isn't correct if you believe these people, and IMO, they are understating the severity of the problem.

Then again, 2 years ago on this site, I stated many times they were overbuilding in downtown, and that notion was scoffed at too.

[JayGee]

Indeed I do. I said in the post above I saw it on a site that you have to pay for now. However Morgan has since revised his estimate to 12% by the end of this year. This means he added another 2% in just the last 3 months. See this story. I posted those links in response to the claim that it would be no where near 10%. Obviously that isn't correct if you believe these people, and IMO, they are understating the severity of the problem.

Then again, 2 years ago on this site, I stated many times they were overbuilding in downtown, and that notion was scoffed at too.

If I recall correctly, we went through the same thing in the 90's. It is probably a natural cycle. Low vacancy rate leads to construction, which leads to a glut, which curtails construction, etc., etc. It would be nice if it were more consistent, but it probably never will be. It's difficult when the build cycle of a tower project is so long.

Just curious, Monsoon, what was the basis two years ago for your statements that they were over-building downtown? Did you have some insight that this economic crisis was coming and result in the near collapse of the banking system and resulting slump in the commercial real estate market? Some people saw it coming back then but were afraid to come out and say it. But the signs were definitely there.

[monsoon]

..... Did you have some insight that this economic crisis was coming and result in the near collapse of the banking system and resulting slump in the commercial real estate market? .....

Yes, it's called common sense. Rarely however, and especially these days, is it very common.

To be more specific, I've posted my rationale for this in various parts of UrbanPlanet, but not necessarily in the Charlotte section. There isn't much of an audience in the Charlotte crowd for these notions and I can only take so much abuse. You, for example, have already called me irrational this week.

Finally, I also disagree with your characterization this is similar to the 1990s. It isn't. If it wasn't for the fact that the Obama and Bush administrations have poured, literally, a Trillion dollars into the banking system then we would be seeing a carnage downtown that would simply be unprecedented. BofA and Wells would both be gone by now and there would be 40,000 fewer jobs in downtown. People have mistaken this new bubble as a sign of bottoming out of the recession, things are gonna get better, etc. As I said common sense isn't very common anymore. This bubble will pop too.

[uptownliving]

Indeed I do. I said in the post above I saw it on a site that you have to pay for now. However Morgan has since revised his estimate to 12% by the end of this year. This means he added another 2% in just the last 3 months. See this story. I posted those links in response to the claim that it would be no where near 10%. Obviously that isn't correct if you believe these people, and IMO, they are understating the severity of the problem.

Still waiting for a source that backs up your original statement that the current downtown vacancy rate is 10.5%.

You can search the CBJ and they dont have any stories that say the current downtown vacany rate is 10.5% or anywhere close to that number.

So far you are the only source on planet earth that claims the current downtown vacancy rate is 10.5%. Thats fine. But please don't waste our time on here pretending that stories exist in the one local paper you have to pay for online (yet you can search the CBJ for free) that back you up. Ironically this is also a paper you have repeatedly say you don't trust....and yet today...they are the only source you trust.

Fox Business News doesn't back up your statements.

Charlotte Observer doesn't back up your statements.

Charlotte Business Journal doesn't back up your statements.

Colliers Pinkard reports doesnt back up your statements.

[hokiehigh]

I know this is getting off topic, but I don't think everything is getting better yet. I think it will, but it shouldn't go back to the same growth patterns of the previous eight years. I see most of that as a "fake" economy, meaning wealth created with nothing to back it up. I think there is a middle area where the economy will settle. I doubt BofA or Wells will go anywhere. We may have more ups and downs but that is basic capitalism.

As for the vacancy rate. If it is 10%+ or even below, it really isn't that big of a deal. Simple supply and demand. We won't build again until there is demand. We overbuilt just like everyone else. I am just glad I am not in construction.

[JayGee]

Yes, it's called common sense. Rarely however, and especially these days, is it very common.

To be more specific, I've posted my rationale for this in various parts of UrbanPlanet, but not necessarily in the Charlotte section. There isn't much of an audience in the Charlotte crowd for these notions and I can only take so much abuse. You, for example, have already called me irrational this week.

Finally, I also disagree with your characterization this is similar to the 1990s. It isn't. If it wasn't for the fact that the Obama and Bush administrations have poured, literally, a Trillion dollars into the banking system then we would be seeing a carnage downtown that would simply be unprecedented. BofA and Wells would both be gone by now and there would be 40,000 fewer jobs in downtown. People have mistaken this new bubble as a sign of bottoming out of the recession, things are gonna get better, etc. As I said common sense isn't very common anymore. This bubble will pop too.

Well I didn't call you irrational, I was referring to the post. If anyone had posted the same response, I would have said the same thing.

I hope you're wrong about the new bubble, but you are not alone in saying that.

[JayGee]

I see most of that as a "fake" economy, meaning wealth created with nothing to back it up.

If Joe Jones next door runs his credit card bill up to its max with a new pool in back of his McMansion, new car, etc. you would probably look at him and say 'man he must be doing great'. Till the bills come due. Same with the recent economy as you stated. The wealth was fueled with Monopoly money backed by record leveraging and no oversight. Then the money spigot turned off.

[Neo]

For anyone that wishes to discuss the vacancy rate for uptown then please do so in a new thread. Relating the ghostly figure of a 10.5% vacancy rate for uptown with the NASCAR Plaza at the Hall of Fame is a stretch. If you want to discuss this building in particular in regards to it being built on spec then you are welcome to do so, but this isn't the thread to debate vacancy rate as a whole for uptown.

[HopHead]

The NASCAR Hall of Fame is set to open on May 11, 2010. This is about a week before the All-Star race, so it will give fans a great opportunity to see it when they are town for the two races. A number of exhibits will start to be set up in the coming months.

[InitialD]

Toured the Hall of Fame today. I only occasionally follow the sport, but I'm very excited about the hall of fame after I've seen it from the inside. It looks so much bigger inside than outside. A few photos:

The rest of the photos.

[monsoon]

We don't really have an on-going Nascar topic so I will post this here as it is close enough.

CNBC is presenting, what they call, an in depth look at the business of Nascar. While not specifically about Charlotte, it's hard to imagine that Charlotte might not make an appearance or two in this program and maybe even this project will be mentioned.

They offer up some teasers. Nascar attendance and revenue is down about 10%. This isn't bad when you consider where we are in the economy The business relies on corporate sponsorship far more than any other professional sports business. It costs a team ~$600,000 to put a car in a major race. The industry is trying to put out that it is "green". (this seems like bit of a stretch to me) Nascar has been lobbying congress to save GM, Chrysler and Ford for obvious reasons. Nascar employs a lot of people which we all know to be true here.

The program will be on Thursday night at 9 pm. Caveat: CNBC is an abomination of NBC/Universal. Don't go in with high expectations.

[JayGee]

We don't really have an on-going Nascar topic so I will post this here as it is close enough.

CNBC is presenting, what they call, an in depth look at the business of Nascar. While not specifically about Charlotte, it's hard to imagine that Charlotte might not make an appearance or two in this program and maybe even this project will be mentioned.

They offer up some teasers. Nascar attendance and revenue is down about 10%. This isn't bad when you consider where we are in the economy The business relies on corporate sponsorship far more than any other professional sports business. It costs a team ~$600,000 to put a car in a major race. The industry is trying to put out that it is "green". (this seems like bit of a stretch to me) Nascar has been lobbying congress to save GM, Chrysler and Ford for obvious reasons. Nascar employs a lot of people which we all know to be true here.

The program will be on Thursday night at 9 pm. Caveat: CNBC is an abomination of NBC/Universal. Don't go in with high expectations.

It really kills me when you hear people talk about NASCAR being so environmentally hostile because they 'use gas to drive around in circles', or something along those lines.

How much jet fuel does it take to transport one baseball team across country? Multiply that by the number of teams flying times the number of games in different states. I would think the fuel NASCAR teams use on that one race per week would pale in comparison. But you never hear about that!