Chiquita lease will give big boost to Charlotte’s office market

December 2, 2011

Charlotte Business Journal
December 2, 2011

Trinity Capital Advisors and Rubenstein Partners are the big winners in the Chiquita Brands International relocation. But the banana company’s decision to move its corporate headquarters here is a positive sign even for those landlords who didn’t land the new tenant.

At a press conference this week announcing its relocation from Cincinnati, Chiquita confirmed it is negotiating to relocate its headquarters to NASCAR Plaza, the 19-story, 390,000-square-foot office tower at the corner of South Caldwell and East Stonewall streets. Trinity and Rubenstein purchased the building early in 2011, after it had fallen into foreclosure in late 2010. Chiquita is expected to lease 150,000 square feet at NASCAR Plaza, which lists 255,800 square feet as available.

Andrew Jenkins, managing director at Karnes Research Co., says Chiquita’s move will likely lower the uptown office vacancy rate by almost a full percentage point to 12%.

And Chiquita is a nice fit for NASCAR Plaza, he says. “You don’t really see a law firm opening up at NASCAR Plaza, whereas Chiquita is used to that type of marketing. And there’s no telling if there’s some kind of supplier-vendor network that they might bring down with them that also serves their business.”

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Charlotte’s SouthPark on Target

February 18, 2011

Charlotte Business Journal
February 18th, 2011

A 10.5-acre tract in SouthPark is being targeted for an ambitious development with a Target-anchored collection of shops and apartments.

Renderings outline plans for what’s billed as The Market at South Park. Lincoln Harris, a consultant to property owner Atlanta-based Reynolds Capital Group, has made inquiries with area brokers about tenants for the proposed project. The site lies behind the SouthPark Towers on Fairview Road on vacant land bounded by Piedmont Row Drive South and Barclay Downs Drive.

The biggest retail name linked to the project: Target Corp., one of the main anchors at high-profile developments such as Blakeney and the Metropolitan on the edge of uptown. Target could make a decision on the Charlotte development within a few weeks, an industry source says…

Andrew Jenkins, Managing Partner

Andrew Jenkins, Managing Partner, KARNES

Although retail demand remains weak, the submarket that includes SouthPark had some of the best leasing activity in Charlotte during 2010, according to Karnes Research Co. Last year, the area absorbed 72,170 square feet of retail space, up from a net loss of 257,023 square feet in 2009. The retail vacancy rate in the submarket dropped to 8.6% in December from 9.8% year end 2009. Overall, the retail vacancy rate for the greater Charlotte market increased to 9.9% from 8.4% in 2009…

Still, Andrew Jenkins, managing partner at Karnes, says that a new retail project opening in 2012 or 2013 could benefit from continued improving consumer confidence and spending. In the current economic climate, new development is “going to go to the places with the best demographics in terms of existing households and incomes,” he says. Using that criteria, SouthPark is a safe bet, Jenkins says…

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Commercial appraisals tricky in a down market

February 4, 2011

February 4th, 2011
Charlotte Observer

Mecklenburg County tax appraisers will start revaluating local commercial real estate next week – a task that could produce unwelcome surprises for both property owners and local government. Property owners have been paying taxes based on values set in 2003. State law requires revaluation every eight years – leaving officials wrestling with setting values in one of the worst markets in decades….

Calculating rental income could also prove tricky, said Andrew Jenkins, analyst and managing partner with Karnes, a real estate research firm. Actual lease rates are often lower than advertised asking rates because landlords are granting concessions to lure tenants during the downturn…

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Trinity Capital group taking over at NASCAR Plaza tower

January 7, 2011

January 7th, 2011
Charlotte Business Journal

Charlotte-based Trinity Capital has teamed with a Philadelphia real estate investment firm to buy the NASCAR Plaza office tower, which had fallen into foreclosure after a loan default by its previous owner. Trinity and partner Rubenstein Partners have purchased the 19-story, 390,000-square-foot building at South Caldwell and East Stonewall streets…

The office vacancy rate uptown stood at 12.6% at the end of the third quarter, according to Karnes Research Co. That’s up from 2.3% two years earlier. The average rental rate was $25.79 per square foot, down from $27.78 two years earlier. NASCAR Plaza’s quoted rental rate has been around $27. Karnes Managing Director Andrew Jenkins says the NASCAR brand could still be off-putting to some potential tenants. But an aggressive rate can go a long way, he adds. “I think you can get beyond that if the rate’s good enough,” Jenkins says. “If you can bring to the table parking and suburban rates, why can’t you lease that building?”…

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High-rise once known as Wachovia Center for sale

October 18, 2010

October 18, 2010
Charlotte Business Journal

A major uptown office tower is for sale, and the interest it generates could be a barometer for the health of Charlotte’s commercial real estate market. The 400 South Tryon building, owned by an affiliate of UBS Realty Investors, has been listed for sale with CB Richard Ellis Group Inc….

Uptown’s vacancy rate has ballooned to 12% from 2.5% in 2008, according to Karnes Research Co. Andrew Jenkins, managing partner at Karnes, expects 400 South Tryon will fetch between $150 and $200 per square foot, or $88 million to $117 million…Says Jenkins: “If they move out, you’ve got a lot of available space at an affordable rate, relatively speaking, so it might be a good long-term play.”

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BofA grabs bigger piece of tower

May 28, 2010

May 28th, 2010
The Charlotte Business Journal

Bank of America Corp. has taken its new, 32-story uptown office tower off the market and plans to fill all but 5% of the space with its own employees…The bank had been marketing up to 267,000 square feet for lease through real estate firm Lincoln Harris. And it has leased about 30,000 square feet to tenants that include private-equity firm Pamlico Capital….

At the end of the first quarter, the vacancy rate in Charlotte’s uptown office market stood at 12%, up from 3.2% a year earlier and 8.8% at the end of 2009, according to Karnes Research Co. Andrew Jenkins, a managing partner at Karnes, had forecast uptown’s vacancy rate to exceed 13% with the delivery of 1 Bank of America. Barring any significant new vacancies uptown, the bank’s decision will keep the vacancy rate around 12%, he says.

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Industrial sector builds despite high vacancies

October 17, 2009

Among Charlotte-area warehouses and distribution centers, vacancy rates are rising. Rents are falling. Yet two local developers are betting now is the time to build more than 300,000 square feet of new industrial space…Charlotte’s industrial market has fared relatively well during the recession compared with the office and retail markets because developers didn’t overbuild, said Karnes analyst Andrew Jenkins. One reason is developers grew cautious when industrial vacancy rates peaked at 19.2 percent in 2003, Jenkins said, “scaring everyone into being careful where they built.”
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Waxhaw may get new mix with a town center project

September 19, 2009

September 19, 2009
Charlotte Business Journal
A Matthews developer may do something next year that has been rarely accomplished in the Charlotte area in this economy: Start construction of a mixed-use commercial center…Having Waxhaw sign on to the project may be the key to finding financing, says Andrew Jenkins, managing partner of real estate analysis firm Karnes Research Co. in Charlotte. Such an agreement “would ultimately be the main draw for the project,” he says. The Commons at Wesley Chapel, a commercial center with a Target store, may provide competitors for small shops, Jenkins says.
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Sales of office, retail and industrial property plunge in Charlotte

August 14, 2009

August 14, 2009
Charlotte Observer
Two reports on Charlotte’s commercial real estate market released this week show a continued decline in demand for commercial space as employers contract and retailers close up shop amid weak consumer spending….Net absorption, or the amount of space occupied minus the space vacated, was negative 134,800 square feet during the first half of this year for Charlotte-area office space, according to Karnes Research. Last year, net absorption was a positive 670,800 square feet. The two years prior it was around 1.4 million per year. “Demand is down, a lot,” said Karnes analyst Andrew Jenkins.

Also noteworthy: No new buildings were completed in the suburbs during the first half of this year. That hasn’t happened since 1992, Jenkins said. Last year, developers put 2 million square feet of new space on the market, all of it in the suburbs, according to Karnes. “It’s a good sign the developers have pulled back and are aware of what was going on,” Jenkins said. “They’re tightening belts, and it’s hard to find financing to build new buildings. At least they recognize this is not a good time to be delivering speculative space.”
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Meridian center in Charlotte’s University Research Park is taken back by Hartford Financial

July 31, 2009

July 31, 2009
Charlotte Business Journal
The Meridian Corporate Center is officially out of receivership and under new ownership. The owner of the 1.9 million-square-foot University Research Park office complex handed the property over to its lender, The Hartford Financial Services Group Inc., earlier this month in lieu of foreclosure. The transaction was valued at $110 million…Although the litigation between Hartford and Cerberus continues, the Meridian Corporate Center likely becomes more marketable now that it’s out of receivership and has clear ownership, says Andrew Jenkins of Karnes Research Co. And given the current economy, it’s unlikely that Hartford would be able to find a buyer for the office park in the short term anyway, he says.
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