The Good News Report

[Cadi40]

Great News, Good to see that the amount of Foreign companies investing in Charlotte space is going up at a steady rate!

[Scribe]

As we have Areva spun off nuclear division moving out to VA, this piece that Biz Journal just posted on Barings is a nice counter...

Quote

He says two-thirds of the company's assets come from clients outside the U.S., so it is common for Barings to bring those clients to visit Charlotte. According to Finke, that role allows them to bring investors into the area and show them the opportunities Charlotte has to offer.

"We're able to give them a taste of Charlotte, and I think this building enhances our ability to do that," Finke says. "You're representing where you're from. We're from Charlotte."

Paywalled https://www.bizjournals.com/charlotte/news/2018/04/04/how-investment-firm-barings-builds-momentum-in.html

[KJHburg]

^^^ This my favorite quote from the above Business Journal article on Barings

""Today, Barings employs around 500 people in Charlotte and occupies the top seven floors of the tower. It had more than $304 billion in assets to manage, as of Dec. 31, 2017. The firm previously operated out of the Duke Energy Center.  "Charlotte is now home to a very international company," says Tom Finke, CEO of Barings, noting the city's role as both central and local for the company. The new offices, completed just six months ago, allow Barings to have control over its workspace while allowing room for growth, he adds.""

They leased on 50,000 sq ft in Duke Energy Center now about 200K here and just remember all this job growth came under the radar and without big incentive dollars doled out.  This is GREAT for Charlotte. 

Plus this quote about the future: 

""With modern architecture and a sprawling wraparound terrace offering an uptown view, 300 South Tryon also comes with its own cafeteria and Parliament coffee bar on the 25th floor. The firm leases two more floors in case the need for expansion arises.""

2 more empty floors for their expansion sounds good to me and to Charlotte!

 

Edited April 5, 2018 by KJHburg
added another quote

[Scribe]

14 hours ago, KJHburg said:

This is GREAT for Charlotte.

Agree wholeheartedly! I got a tour of their office space a couple weeks back. The board room on top floor is definitely impressive and the "Sky Room" was equipped with AV equipment that I did not think Barings would need...

[KJHburg]

I think this is pretty good news don't you?  Just catching up on things out here in the Mountain time zone.  https://www.bizjournals.com/charlotte/news/2018/04/05/acc-championship-charlotte-good-for-10-year.html?ana=e_clt_bn_newsalert&u=oAaDx%2B74FoP4qOJ%2By4AU6dhJPpc&t=1522978141&j=80872371

[KJHburg]

2 foreign companies both choose north Mecklenburg for locations.  Yokohama Japanese tire manufacturer R and D facility and German Kurz a manufacturer of coatings for its North American headquarters. Approx. 145 jobs between them. 

https://www.bizjournals.com/charlotte/news/2018/04/10/japanese-german-companies-to-add-hundreds-of-jobs.html?ana=TWT_staffAF

Yokohama announced this for Concord but maybe never got off the ground there I am sure they did not get any of their incentives if it didn't happen there. Good for the region I guess to keep it here but disappointing for Cabarrus county. 

https://www.bizjournals.com/charlotte/news/2016/08/30/yokohama-to-bring-its-tire-r-d-to-offices-in.html

Edited April 10, 2018 by KJHburg

[KJHburg]

Charlotte office market starts off strong in the 1st quarter of 2018 according to JLL.  The office market absorbed 306,000 sq ft and vacancy stands at 11.7%.  Over 3 million sq ft in the pipeline with the largest chunk uptown of course with Legacy and new Ally Center Tryon Place. 

download your own copy here

http://www.jll.com/charlotte/en-us/Pages/RemoteResearch.aspx?URL=http://www.jll.com/united-states/en-us/research/9035/us-charlotte-office-insight-q1-2018-jll

[Cadi40]

Charlottes still going strong and I don't expect it to slow soon, Even if it does it will still be a high amount of office space being created compared to other cities. 

[KJHburg]

While at first this seems like bad news it ends with good news for Charlotte and Wells Fargo.   Sounds like some job cuts and consolidation in Wells Fargo securities however Charlotte seems to be the place where jobs could come.  

http://www.charlotteobserver.com/news/business/banking/article208813694.html

Last 2 lines of this article:  

"Charlotte is our No. 1 employment market," Shrewsberry said. "We have more people in Charlotte than Wachovia ever did before Wells Fargo and Wachovia merged." "We love Charlotte," he said. "We have an emphasis on moving people to Charlotte where the situation provides for it."

 

[KJHburg]

Speaking of office space in the JLL Office Market 1Q 2018 report for Charlotte and our other peer cities, I found that Charlotte's office market is performing better than them all.

Market Size                                                    Absorption  % Absorption   Vacancy Avg Asking             under Construction sq ft.

Raleigh/Durham Totals 48,150,905  153,505        0.3%              10.2%  $24.61                               2,636,251   

Nashville Totals 36,281,816  -77,463                     -0.2%             9.6%  $27.27                               1,954,709

Atlanta Totals 146,936,743  357,357                    0.2%               16.9%  $26.28                               1,883,441

Charlotte Totals 51,191,720 306,811                 0.6%            11.7%  $26.89                                3,032,016

We have more construction than Atlanta  a market 3x our size and percentage of office space absorbed we doing twice as better as the next closest competitor Raleigh Durham.  More office space absorbed means more new buildings. 

 

Edited April 15, 2018 by KJHburg

[Cadi40]

Even though the apartment boom may slow, I expect the office sector to continue to boom for a sustained rate for a prolonged period of time. This is due to cheap prices, A growing tech sector, A booming economy, And an Admirable quality of life. 

[Guest]

Speaking of office space in the JLL Office Market 1Q 2018 report for Charlotte and our other peer cities, I found that Charlotte's office market is performing better than them all.
Market Size                                                    Absorption  % Absorption   Vacancy Avg Asking             under Construction sq ft.
Raleigh/Durham Totals 48,150,905  153,505        0.3%              10.2%  $24.61                               2,636,251   
Nashville Totals 36,281,816  -77,463                     -0.2%             9.6%  $27.27                               1,954,709
Atlanta Totals 146,936,743  357,357                    0.2%               16.9%  $26.28                               1,883,441
Charlotte Totals 51,191,720 306,811                 0.6%            11.7%  $26.89                                3,032,016
We have more construction than Atlanta  a market 3x our size and percentage of office space absorbed we doing twice as better as the next closest competitor Raleigh Durham.  More office space absorbed means more new buildings. 
 

And yet we are about to lose a big fish to Nashville, don’t get it


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[tozmervo]

36 minutes ago, ricky_davis_fan_21 said:

And yet we are about to lose a big fish to Nashville, don’t get it


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Taxes, probably. 

[CLT704]

1 hour ago, ricky_davis_fan_21 said:

And yet we are about to lose a big fish to Nashville, don’t get it


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AllianceBernstein?

[deleted]

Was in Nashville Thursday.  Great city that has changed more than Charlotte in last 5 years.  I can see why people love it there.  I prefer Charlotte but it's nice.

[KJHburg]

Maybe Alliance Bernstein does not want to be in a competitive job market like Charlotte with lots of other financial people someone on UP mentioned earlier they may not pay as well.   Nashville is just now voting on a transit system which is years and years off from being opened.  I like Nashville but Charlotte's airport, transportation, employment pool etc is far superior.  So who knows we have so many big companies that have announced job expansions and we don't even know where they are going yet in town.  Like Allstate and its 2250 jobs and EY 375 jobs, and even AXA the parent of Alliance Bernstein and their 550 job expansion.  And we are not done yet believe me! 

[SgtCampsalot]

12 hours ago, KJHburg said:

Maybe Alliance Bernstein does not want to be in a competitive job market like Charlotte with lots of other financial people someone on UP mentioned earlier they may not pay as well.   Nashville is just now voting on a transit system which is years and years off from being opened.  I like Nashville but Charlotte's airport, transportation, employment pool etc is far superior.  So who knows we have so many big companies that have announced job expansions and we don't even know where they are going yet in town.  Like Allstate and its 2250 jobs and EY 375 jobs, and even AXA the parent of Alliance Bernstein and their 550 job expansion.  And we are not done yet believe me! 

So how long until a housing market slowdown? 

[KJHburg]

^^^ Housing?  There is severe shortage of homes under $250,000 in the Charlotte region.  I don't see that changing anytime soon as long as job growth is there.  As for homes over $500,000 that market in my opinion is frothy.   Prices can not go up faster than wages or something ultimately gives.  This region is not building enough for sale housing (single family or townhomes)  in the price ranges where the majority of people are buying homes in for a variety of reasons.  I will say this any slowdown in the housing market will NOT be like the housing depression and that is what it was during 2008-2010.   

My point was we have a lot of job growth in the pipeline already with Allstate, AXA, EY, Lendingtree, AvidXchange and under the radar Wells and BofA. 

[11 HouseBZ]

 Yeah to piggyback with personal experience, my wife and I sold our home (in the $200-250K range) and had 4 above asking offers the first day on the market. We closed a few weeks back. My realtor had no less than 4 conversations from out of state buyer agents. One was from Illinois. It's a hot market. 

[SgtCampsalot]

Sure it's strong; Will things overheat? The new tax bill seems it may catalyze such a thing, if nothing else.

More to the point: has anyone ever seen a boom like this one now (in Charlotte, or any other booming city)? Or is it my youth that leads me to think it is inevitable to drop off?

[KJHburg]

^^ Housing at some point will slow down but like I said in the price ranges where the majority of people are in we are not building enough homes which will sustain that market for a long time.  There is always a need for entry level which now in this town for new homes is upper 100s around 200k.  Housing starts in Charlotte right now are way BELOW record levels from 2006-2007

Housing recap from MetroStudy http://www.metrostudy.com/charlotte-housing-4q17-home-builders-continue-struggle-keep-demand-lower-price-points/

 

[15895]

16 minutes ago, SgtCampsalot said:

Sure it's strong; Will things overheat? The new tax bill seems it may catalyze such a thing, if nothing else.

More to the point: has anyone ever seen a boom like this one now (in Charlotte, or any other booming city)? Or is it my youth that leads me to think it is inevitable to drop off?

 

20001-2008 but instead of Apartments, it was condos.  Equally as impressive. 

 

I consider this phase to have started slightly before Element with SouthEnd's boom. Knights Stadium. Then Element.  Then Embassy Suites. Then Skyhouse. Then a lot of stuff.

Edited April 16, 2018 by AirNostrumMAD

[deleted]

3 hours ago, SgtCampsalot said:

Sure it's strong; Will things overheat? The new tax bill seems it may catalyze such a thing, if nothing else.

More to the point: has anyone ever seen a boom like this one now (in Charlotte, or any other booming city)? Or is it my youth that leads me to think it is inevitable to drop off?

I left San Diego for a few reasons in 2004 but a big factor was that I was positive that the housing market was a huge bubble.  It was and my timing was good (I actually could have made a bit more if I had waited but better too soon than too late).  The market crashed there and virtually everywhere obviously (though much less so here comparatively because it never got too crazy before the crash).  Now, though, housing costs even more than pre-crash in SD.  Good article today in WSJ on Boise (housing is waaay up).  Banks are not doing as much direct sub-prime lending but they are instead lending to the companies doing that lending (seems like the outcome could be similar).  Credit card debt is increasing, as are delinquencies.  People are again taking tons of money from their rapidly increasing houses in home equity loans.  I don't think the crash will be as bad as before but you can be sure a crash will occur as soon as you hear people say that a crash won't happen.  Months before Lehman cratered I had a colleague telling me you couldn't lose money in FL real estate (she lost plenty though if she had held it she'd have done ok).  I believe Charlotte is still better off than most because so many are moving here and that is creating demand (though many places decimated in the last crash-Phoenix, LV, South FL, Inland Empire-were similar).  Additionally, housing costs as a percentage of income are still reasonable here (but much less so than in 2007-2008 surprisingly).  Look at housing costs as a percentage of income in SoCal.  Crazy.  Long term, they will be okay because it's such an incredibly attractive place to live for a lot of people.  Short-term, I suspect we are within five years of another significant correction (but again, not like the last one).  At this time, I am not hearing of highly leveraged individuals buying multiple properties to flip.  Huge amounts of housing stock was purchased by VC/PE.  That will also moderate the impact (and keep demand higher also).  Increased government regulation of financial institutions will also moderate.     

[enicideme]

19 hours ago, AirNostrumMAD said:

 

20001-2008 but instead of Apartments, it was condos.  Equally as impressive. 

 

I consider this phase to have started slightly before Element with SouthEnd's boom. Knights Stadium. Then Element.  Then Embassy Suites. Then Skyhouse. Then a lot of stuff.

Exactly. This time is very different imho.  

My two cents: Massive numbers of pricey apartments, very few places to actually buy. Go on Zillow and look for 3+ bedrooms for sale uptown (28202). From personal experience, if you’re looking for a 3/4 bedroom condo in uptown  or very close-in, you have single digits to choose from, and those are often far, far above $1mm. I’ve been here since 2002, but if I was looking to move here now, with a family, and live uptown? Very difficult. Before the crash, there were more choices. Still expensive, but they were there - Vue, Element, and a few others. Now, there are a few small complexes that are very expensive. If I wanted to move here and take a job in Charlotte, live downtown, and bring my family, it would be tough. 

[KJHburg]

On ‎4‎/‎14‎/‎2018 at 9:22 PM, KJHburg said:

5Speaking of office space in the JLL Office Market 1Q 2018 report for Charlotte and our other peer cities, I found that Charlotte's office market is performing better than them all.

Market Size                                                    Absorption  % Absorption   Vacancy Avg Asking             under Construction sq ft.

Raleigh/Durham Totals 48,150,905  153,505        0.3%              10.2%  $24.61                               2,636,251   

Nashville Totals 36,281,816  -77,463                     -0.2%             9.6%  $27.27                               1,954,709

Atlanta Totals 146,936,743  357,357                    0.2%               16.9%  $26.28                               1,883,441

Charlotte Totals 51,191,720 306,811                 0.6%            11.7%  $26.89                                3,032,016

We have more construction than Atlanta  a market 3x our size and percentage of office space absorbed we doing twice as better as the next closest competitor Raleigh Durham.  More office space absorbed means more new buildings. 

 

Remember I just posted this well JLL came out with the rankings for the entire country all the largest cities.  Charlotte as percentage of office space absorbed is only bested by 5 cities Dallas, Tampa, Fort Worth, Grand Rapids and the north San Francisco bay market (basically Silicon Valley)    That means in the 1st quarter of 2018 the Charlotte market was a better performing office market than NYC Boston Atlanta, Seattle, LA, San Fran itself, Denver, Chicago, Austin, Nashville  etc.   This means we are filling our office space almost as fast as we can build it.  Charlotte is a well diversified office market attracting lots of tenants from financial firms to tech firms to other office users.   I would look for more office towers to break ground in the suburbs and maybe intown.  

You can download your own copy here 

http://www.us.jll.com/united-states/en-us/research/property/office

Edited April 18, 2018 by KJHburg