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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After seeing relatively little leasing activity for most of 2011, the uptown office vacancy rate is set to fall, thanks to Chiquita International Brands.

The banana purveyor’s announcement that it would move its corporate headquarters to the NASCAR Plaza from Cincinnati could shave nearly 1 percent off the rate – pushing it to 12 percent from its current 12.8 percent, according to Karnes Research in Charlotte.

Uptown’s office vacancy rate has hovered above 12 percent since the second quarter of 2010, when it was 12.1 percent. In 2007, at the end of the economic boom, when empty space was scarce, rates were around 2 percent, the lowest in the country.

In calculating the impact of Chiquita’s new lease, Karnes managing partner Andrew Jenkins estimated that Chiquita would occupy roughly 125,000 square feet – or the top three floors – of the office tower adjacent to the NASCAR Hall of Fame.

Last year, uptown had 11,000 more square feet become available than was leased.

“We’ve just had a shuffle of tenants recently and not a lot of new, good, big deals,” Jenkins said. “We haven’t had a lot of really strong, brand new tenants coming in taking a big chunk of space in a while.”

Countywide, there is 8.85 million square feet of office space available for lease. When Chiquita moves in, it will lower the county’s office vacancy rate to 17.75 percent from 18 percent, according to Karnes.

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“Bissell has been the largest provider of new suburban office space in the Charlotte region over the past 10 years,” said Andrew Jenkins, Managing Partner, Karnes. “Bissell has proven that despite difficult economic conditions, there continues to be significant demand for Ballantyne Corporate Park, as evidenced by major recent leasing activity that includes Babcock & Wilcox Nuclear Energy, Akima, HVM, Sompo Japan, and Mitsubishi Nuclear Energy Systems.”

Left to Right: Ned Curran–President and CEO of Bissell, Mayor Anthony Foxx, “Smoky” Bissell–Chairman of Bissell, Jennifer Roberts– Mecklenburg County Commissioner, Jeff Edge–Senior Vice President of Economic Development with the Charlotte Chamber of Commerce

The Class “A” buildings will exude international modernism and include two-story lobbies, all-glass exterior curtain walls, and provide free structured parking at a ratio of nearly four spaces per 1000 square feet. Located at Ballantyne Corporate Park’s east entrance, the buildings will establish a landmark location and will feature balconies on all upper floors allowing tenants to further enjoy unparalleled views.

“We are thrilled that Bissell continues to show its confidence in the Charlotte office market with the construction of additional speculative office buildings,” said Jeff Edge, Senior Vice President of Economic Development, Charlotte Chamber of Commerce. “Our clients continue to give Ballantyne Corporate Park high marks in their analysis of office space options in Charlotte, and I am confident that this commitment by the Bissell organization will result in additional corporate relocations and expansions to Charlotte and to Ballantyne.”

“We might appear contrarian to some, but our decision to move forward is based on our recent transaction volume, our prospect activity and confidence in the Charlotte market and Ballantyne in particular,” said Smoky Bissell, Chairman of Bissell.

Bissell Development will oversee the project, working with architecture firm LS3P Associates and general contractor Rodgers Builders. The construction facilitator is Marsh Associates, Inc.

Over the past 20 months, Bissell has signed leases totaling more than 850,000 square feet of new office space in Ballantyne Corporate Park and in stabilized product has an occupancy rate of 93%.

Ballantyne Corporate Park
Ballantyne Corporate Park, a 535-acre master-planned Class “A” office and business community in Charlotte, North Carolina, includes over 3.5 million square feet of office space and nearly 600 hotel rooms as well as restaurants, medical and retail amenities. Ballantyne Corporate Park was awarded the 2010 International Office Park of the Year by the Building Owners and Managers Association, recognizing quality in office buildings and excellence in building management. Zoned for more than 5 million square feet of office space, Ballantyne Corporate Park is positioned in the heart of Charlotte’s largest concentration of educated and experienced labor. Current corporate clients include SPX Corporation, AXA-Equitable, Bank of America, Snyder’s-Lance, Premier, Liberty Mutual, LendingTree, Polypore, Babcock & Wilcox, Camstar, ESPN and the Carlisle Companies. For more information, visit the company’s website at www.ballantynecorporate.com.

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Charlotte Business Journal: Major expansion planned for the east side of south Charlotte’s Ballantyne | Charlotte Business Journal

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, 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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An Atlanta real estate firm has bought most of the Poyner Place shopping center in North Raleigh for $18.15 million, which is less than half what a pension fund paid for the same property five years ago. The investment is the first in the Triangle by RCG Ventures, a private firm that owns more than 50 retail properties across the country…

The smaller retail spaces in the center struggled initially, said Brian Reece, a partner with Karnes. “I just think it’s really a visibility issue,” he said. “The road network is below it and so it’s kind of up top, and if you’re not there within the Target area you’re not going to see it.” But the entire area is rapidly being redeveloped, including the opening of the Walmart and a Courtyard by Marriott. There’s also considerable land behind Wal-Mart where additional houses or apartments could be built. “With the connection of Capital Boulevard and Interstate 540 right there, that corridor is definitely on the radar screen for a lot of people,” Reece said….

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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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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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KARNES Triangle Office Market Overview - Source The KARNES Report

The Karnes Triangle office inventory comprises multi-tenant office buildings for lease larger than 15,000 square feet located in Wake, Durham and Orange Counties. As of the third quarter of 2010, the Triangle office market contained 656 buildings totaling over 42 million square feet. The Keystone Centennial Science Center, which totaled 72,000 square feet, was the only new office building completed during the third quarter of 2010, while the 142,762-square-foot 9 Davis Drive building was removed from the for-lease inventory after it was purchased by Syngenta.

Approximately 7.72 million square feet, or 18.4%, of the Karnes office inventory was vacant during the third quarter of 2010. This rate was down 0.4% of a point from the historical high of 18.8% reported during the second quarter of 2010 as net absorption totaling 151,775 square feet outpaced new supply totaling 72,000 square feet. The removal of the 9 Davis Drive building, which had been fully vacant when purchased by Syngenta, also aided in reducing the region’s overall vacancy.

Demand during the third quarter of 2010, which totaled 151,775 square feet, was primarily derived from strong leasing in Cary, where net absorption totaled 115,212 square feet. Wake County Public Schools expanded into a total of 173,751 square feet at Crossroads Corporate Park during the third quarter and a shuffle of the park’s tenants to accommodate the move allowed for further renewals and expansions to occur during the third quarter. West Wake, which reported the only new completion during the quarter, ranked third in terms of overall net demand with the 72,000-square-foot Keystone Centennial Science Center delivered more than half occupied by Advanced Instrumental Systems (34,015 square feet), All Systems Broadband (4,708 square feet), and Pentair Water Pool & Spa (1,171 square feet).

After averaging approximately 1.74 million square feet of new office construction per year between 2007 and 2009, the Triangle market delivered only 220,725 square feet of new office space during the first nine months of 2010. With under construction office space totaling less than 100,000 square feet during the third quarter of 2010, the Triangle office market will likely report its lowest annual level of new office construction since Karnes began tracking the market in 1996. The Triangle office market has averaged more than 1.5 million square feet of new office construction in every year since 1996, with the lowest level reported in 2003 when 443,416 square feet was delivered. While this lack of supply-side pressure continues to be a welcome sign for the local economy, a more encouraging sign will be leasing activity on the more than 7.7 million square feet of vacant inventory. Recent announcements such as Duke Medicine’s 60,192-square-foot lease at Riverbrich and Inspire Pharmaceuticals’ 42,854-square-foot lease at Brier Creek Corporate Center #6 are the more encouraging signs that the Triangle market will continue to slowly recover through 2011.

Read the Entire KARNES Report Office Online by joining the Triangle Commercial Property Exchange

Annual membership fees include access to the quarterly office, industrial and retail reports as well access to many additional member benefits including searching the entire property database, sending broadcast emails with wants/needs and listing availabilities, generating high quality property brochures, and much more.

The KARNES Triangle reports have been produced for 15 years and contain detailed information on vacancy, absorption, completion, and rental trends. The reports also include breakdowns by submarket as well as tenant activity details and development lists.

Triangle apartment sales may top $500 million this year as investors’ appetite for the properties is showing no signs of waning. Robinson Development Group of Norfolk bought the 452-unit complex from Stonehenge Associates LLC. The price works out to about $77,000 per unit for a complex….The apartment vacancy rate in the Triangle was 6.7 percent in September, compared to 9.5 percent a year ago, according to the Triangle Apartment Association and Karnes Research. Average rents were $821 a month, up $23 from the average reported a year ago.

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Phone-Tree, a 21-year-old firm that provides messaging and communication services to churches, hospitals and others, has relocated 50 employees from Reynolda Road to downtown as part of an expansion.
The firm doubled its space, occupying all 16,000 square feet of Winston Tower’s 18th floor….

Asking rates in the building are around $12 per square foot, Kelley said, which is slightly below the $13 average for “Class B” properties that research firm The Karnes Report has been finding in the Triad for the past two years or more.

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