GMAC might relocate HQ to Charlotte

[atlrvr]

This was mentioned in the Wachovia thread, but probably deserves its own thread.

This would be huge news for Charlotte, as GMAC is a nationally known financial company, though, I know they are suffering as well. They do a lot of commercial and auto loans, which aren't so hot.

The article in the Observer discussing it.

http://www.charlotteobserver.com/breaking/story/365857.html

They mention Ballantyne in the article. I wonder if this would be a permanent location, or temporary because of the large amount of available space there, and if they would shop for a downtown location in the future.

One thing that struck me as strange is they are co-owned by General Motors and Cerebus Capital (which owns Chrysler). I wonder if the company would be spun off into its own publically traded entity? It has to be a drain on the balance sheets of GM right now, and Cerebus has lot of equity in distressed companies (Chrylser, Scottish RE, LNR)....are they known as a turnaround specialist? I hope so with their investment portfolio.

Edit...I answered my own question. Cerebus invests in "undervalued" companies per their corporate literature. I think even that is a bit generous.

[swh1972]

GMAC has, until recently, been one of the few profitable divisions within General Moters. A spin off and HQ relocation to Charlotte could be a good land for the Queen City.

[dubone]

I think both this and the Morgan Stanley growth here are designed almost entirely to take advantage of the skilled people that will leave Wachovia next year (attrition and downsizing). It is a smart move for companies trying to build a retail bank from scratch.

I wish they'd pursue space in town or at least near transit, but given that times are so tough, it is understandable that they'd go for cheap.

[HopHead]

I think both this and the Morgan Stanley growth here are designed almost entirely to take advantage of the skilled people that will leave Wachovia next year (attrition and downsizing). It is a smart move for companies trying to build a retail bank from scratch.

I wish they'd pursue space in town or at least near transit, but given that times are so tough, it is understandable that they'd go for cheap.

[dubone]

Diversification is for the long term. We need jobs for the human beings that are here and will be unemployed in this recession. Most of their resumes are financial services resumes, and if most had to move to find jobs, then it would be a further negative force on the local economy.

Also diversification isn't helping anyone right now, as your mutual funds are probably showing in this economy. They're ALL hurting in this economy, except for gun sales.

[Spartan]

Ugh. Ballantyne. Good for our jobs and local economy though. I assume there is not enough room for such a large company in any office tower uptown. Will the new Wells/Wachovia tower increase our vacancy rate substantially?

[Charlotte_native]

Nice to read some good local news. Interesting that these two companies are considering a move here right now -- glad they've been semi-public about looking as well so it isn't just rumor. Can we have a few pep rallies to help the process?

[Andyc545]

It's hard to fathom two possible rumors of HQ relocation's to the Charlotte area in one week alone. Whatever happens, it's certainly some positive news in such a dismal time. GMAC is a huge company. Hopefully they are using Ballantyne as a temporary location, and would make the move progressive, only moving small amounts of people and having a long term plan with uptown space (as it's increasingly becoming a more attractive space for business) and eventually moving more people here. Having this interest in the city could be huge for the Charlotte economy and whenever the swing of the recession begins progressing upwards and the US starts a stage prosperity, it could place Charlotte in a position to come through stronger and faster.

I'd speculate we are seeing this banking HQer or business relocation here to help pick up some Wachovia talent that may be left over after the merger.

Edit: What is a typical rental space rate in the Ballantyne midrises versus uptown space? Is Ballantyne really much cheaper?

Edit2: I'd imagine the Charlotte Chamber has something to do with this, maybe? If they are this successful in gaining banking prospects, I hope they could be successful in gaining some new diversity.

[atlrvr]

As far as the cost between Uptown and Ballantyne.

One of the new 10 story LEED towers just completed in Ballantyne is leasing for $28.50/sq. ft. and has all 245,000 sq. ft. vacant.

There isn't anything currently vacant over 50,000 sq. ft. in Uptown, with space at Carillon and Independence being marketed once Deloitte and Wachovia move out in early 2010. Both of those lease for about $30/sq. ft. for "used" space and significantly less parking. Two new towers opening next year, NASCAR and Novare/Trinity's both offer over 200,000 sq. ft. of contigous space offered in the low $30's. Prime Tryon St. towers looking for tenants are 300 S. Tryon and 631 N Tryon (old Renaissance site) could offer over 300,000 sq. ft. contiguous are are being marketed in the mid to upper $30's.

My guess is Bissell will give them a sweetheart deal to take one of their new empty buildings that are now going to have a hard time getting filled. The problem is, once management settles into their B-Tyne homes, they won't be compelled to move the offices downtown.

[Nostyle]

When I used to work for a subprime lender we sold a lot of our loans to GMAC. As this situation has gotten worse and worse I knew GMAC was going to take it on the chin. Ironic how their debacle might actually end up benefitting Charlotte.

[krazeeboi]

It would be something if Wachovia's demise would actually lead to a stronger local economy in the long run, still fueled significantly by financial services. Looks like it's quite the possibility.

[Andyc545]

It would be something if Wachovia's demise would actually lead to a stronger local economy in the long run, still fueled significantly by financial services. Looks like it's quite the possibility.

[monsoon]

I am not so sure about long term stability since this is a move on GM and Cerebus's part to simply get up to the federally funded taxpayer bailout trough where all the other finance industry pigs are currently feeding themselves. Whether they are successful at this is yet to be seen. If it does happen its probably a couple of hundred jobs over the next few years. Of course the only source of information on this seems to be from Bissell who needs to fill up their two office towers they are building down there.

[rancenc]

This is very exciting about the possibility of 2 corporate relocations. Of course I am wondering...does anyone even remotely thinks that Wells Fargo might entertain the idea of moving from high tax, overregulated San Francisco to Charlotte??? Just some food for thought.

[HopHead]

This is very exciting about the possibility of 2 corporate relocations. Of course I am wondering...does anyone even remotely thinks that Wells Fargo might entertain the idea of moving from high tax, overregulated San Francisco to Charlotte??? Just some food for thought.

[palmetto75]

This is very exciting about the possibility of 2 corporate relocations. Of course I am wondering...does anyone even remotely thinks that Wells Fargo might entertain the idea of moving from high tax, overregulated San Francisco to Charlotte??? Just some food for thought.

[atlrvr]

As a matter of principal, it irks me that GMAC is playing games by suggesting TARP funds could be used to meet their capital threshold of becoming a holding company that qualifies for TARP funds. On the flip side, I'm more worried about Charlotte's economy than the principals of corporations at the moment, so if they can get away with it, and Charlotte is the beneficiary, then good!

I still think they would remain in Ballantyne, but it would help law firms and accounting firms in the city which are located Uptown, so that is a positive, as well as help stabilize the job market which in turn will stabilize the commercial and residential real estate markets across the city.

____________________________________________________________________

In other good news, in this weeks CBJ, Areva S.A. (a French nucleur engineering company) plans to add over 500 jobs to Charlotte over the next 3 years. They were formerly downtown, but not at at Univ. City. Assuming they have to expand again, perhaps they will return to downtown. I'm not sure there is enough space for them downtown though, as they would probably want 300k-350k sq. ft.

_____________________________________________________________________

In regards to Wells moving to Charlotte, pretty unlikely if you ask me, but the way those things typically work is some of their senior execs enjoy their time in Charlotte more than they do in their home office (S.F.) and decide to relocate here. Once enough do that, the HQ migrates. Charlotte could also come out of pocket and offer billions of $$$ in incentives, but I don't see that happening.

[dubone]

I don't think declaring themselves a bank holding company is purely to tap the bailout. It has been an established trend that all of these financial services companies that are taking hits in this economy but do not have any deposits to sustain capital. The rapid growth of deposits is what saved Wachovia from failing last summer, until the bank run after WaMu's failure.

I'm surprised that the lease rate for space is so close between Ballantyne and some Uptown buildings. But I am sure that a company tied to the auto industry would never opt to move somewhere that a larger share of commuters would walk or ride transit.

[monsoon]

In other good news, in this weeks CBJ, Areva S.A. (a French nucleur engineering company) plans to add over 500 jobs to Charlotte over the next 3 years. They were formerly downtown, but not at at Univ. City. Assuming they have to expand again, perhaps they will return to downtown. I'm not sure there is enough space for them downtown though, as they would probably want 300k-350k sq. ft.

[atlrvr]

Why not the NASCAR tower then?

Honestly though, there aren't any choices downtown if they truly will needs space before March.

And I know my quotes showed the rates close, but I can't stress the value in the difference in parking. Essentially unlimited vs. 1 free space per 3-4 employees.

Edit. My NASCAR comment was in regards to GMAC being tied to the auto industry. I had forgotten that they are in fact in Meridian, which as Monsoon mentioned in huge and I believe mostly empty. The building is likely to go into foreclosure, but I doubt that will have much impact on Areva.

[Andyc545]

In other good news, in this weeks CBJ, Areva S.A. (a French nucleur engineering company) plans to add over 500 jobs to Charlotte over the next 3 years. They were formerly downtown, but not at at Univ. City. Assuming they have to expand again, perhaps they will return to downtown. I'm not sure there is enough space for them downtown though, as they would probably want 300k-350k sq. ft.

[Charlotte_native]

In other good news, in this weeks CBJ, Areva S.A. (a French nucleur engineering company) plans to add over 500 jobs to Charlotte over the next 3 years. They were formerly downtown, but not at at Univ. City. Assuming they have to expand again, perhaps they will return to downtown. I'm not sure there is enough space for them downtown though, as they would probably want 300k-350k sq. ft.

[monsoon]

^Duke engineering and Westinghouse Charlotte have been involved in nuclear, coal and gas powered electric plant design here in Charlotte for decades. Many many engineers from UNCC have gone on to work in this industry. Duke's nuclear plants are the best in the world when it comes to design and many other countries send people here to see what they have done.

In addition, back in the late 90s the engineers at Duke were involved with the decommissioning of old very unsafe Soviet designed power plants of the Chernoby series and similar. I've used to know several in the CLT engineering community that were involved with this process. Along with that, when the 3 Mile Island scare was going on here in the USA in 1979, locally everyone was assured that we did not have the same issues with the plants in Charlotte because they were locally better designed, engineered and operated.

I've said for a long time that Charlotte's economy is much more diverse than just banking jobs. Energy engineering was going on here for a long time, back when the big banks were just NC banks. The only downer about this is that Duke Energy did not see the worth in such a thing and has since sold all of this off to the French.

[Charlotte_native]

I've said for a long time that Charlotte's economy is much more diverse than just banking jobs. Energy engineering was going on here for a long time, back when the big banks were just NC banks. The only downer about this is that Duke Energy did not see the worth in such a thing and has since sold all of this off to the French.

[Andyc545]

^Nicely wrap up Monsoon. It's true that there is a strong energy presence here in Charlotte and I don't think that its unrealistic to expect some serious expansions here so that we are a trend setter like Monsoon described us being in the past. With the green collared jobs and changes towards green mentality, we could be an even greater leader and become more recognized as a center for future hubs and HQers in the energy division in the upcoming years (FWIW- I hear the 3rd diversity that Charlotte leaders are trying to attract aside from our banking profile is in the Healthcare/Technology Industry). Westinghouse does a lot of work with Duke, and there is also EPRI- Electric Power Research Institute near Areva that does a lot with research. Also, UNCC is expanding the college with its new Electric Research building (EPIC). The article here has a better summary.