By Andrew N Jenkins, Managing Partner, Karnes Research Company
A total of 43.4 million square feet in 520 multi-tenant, for lease buildings greater than 15,000 square feet comprised the Karnes Charlotte office inventory during the second quarter of 2008. New construction in the office sector yielded 634,295 square feet during the second quarter as construction completed on six office projects. Supply-side pressure from new completions totaling 746,595 square feet during the first six months of 2008 was more than four times the level reported during the first six months of 2007 and the level has already surpassed the 692,885 square feet of new office space delivered in all of 2007.
Office construction activity is only just beginning to get heated with more than 4.3 million square feet currently under construction and an additional 4.4 million square feet proposed. Nearly 1.3 million square feet of the office space currently under construction appears likely to be delivered by the end of 2008, bringing this year’s completion total to approximately two million square feet. The projected total will result in the highest level of completions reported since the 2.1 million in 2001 and will easily surpass the 1.3 million square feet averaged each year since 1988. New supply in 2008 will be derived primarily from suburban office construction, while more than three million square feet currently under construction in uptown Charlotte will not likely deliver until 2009. With the scheduled completion during 2009 of the 1.5-million-square-foot Wachovia Corporate Center, the 750,000-square-foot 1 Bank of America Center, the 390,000-square-foot NASCAR Plaza, and the 360,342-square-foot 440 South Church building all uptown, the Charlotte market appears poised to challenge its record of 3.6 million square feet of completions set in 1999. (more…)