2010 Global Market Report - NAI Commercial Real Estate

Asheville, North CarolinaCharlotte, North CarolinaContactNAI BH Commercial+1 828 210 39401 866 810 5893Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold Income416,498446,922219,126$59,194$45,198Asheville is in a great position to do business, sitting at thecrossroads of two major interstates; I-40 which links theeast and west coast of the US, and I-26 which helps connectCharleston, South Carolina, to the Ohio River Valley. Agrowing mix of healthcare, professional/technical services,knowledge-based enterprises and tourism fuels the localeconomy.Industrial vacancy rates were virtually unchanged from2008. New construction in the industrial sector will likely belimited to build-to-suit projects in the new year.Supply-side pressures in the office market are expected tocontinue into 2010 with over 90,000 SF of new space underconstruction and over 195,000 SF of office space proposed.Completions during 2009 surpassed the totals reported ineach of the past three years, and supply side pressure onvacancy will continue to increase as the remaining new spaceis delivered.Approximately 10.5% of the market’s retail inventory wasreported vacant. Several mix-used projects were underway,including Reynolds Mountain and Biltmore Park among others.Barnes and Noble, with their second location in theAsheville market, occupied 28,000 SF of new space at BiltmorePark Town Square, one of the largest tenant movesduring the year.The area unemployment rate was the highest rate reportedsince 1991; however, it continues to be lower than the stateand national average. In addition, the annual job growth rateconsistently tops the state and nation.One of the key advantages to building your business inAsheville is its suitability both as a place to live and a vitalplace to grow your business. Asheville has been ranked byseveral prominent publications. Asheville was ranked numbersix as “Best Metro Places for Business and Careers” byForbes Magazine (March 2009), ranked number two as“One of the Nations Top Arts Destinations” by American StyleMagazine, ranked number eight of Top 10 Metro Areas forQuality of Life by Business Facilities Magazine in July 2009and included as a Favorite City of Business Trips in USAToday Road Warriors in August 2009.ContactNAI Southern Real Estate+1 704 375 1000Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold Income1,782,8272,108,238856,303$72,765$62,093Over the last two years, various sources have ranked theQueen City area as the number one place in America in thefollowing categories: Best Place to Live, Most EducatedWorkforce, Top Large Counties for Recruitment & Attraction,America’s Most Livable Communities and Economic StrengthRanking. Eight Fortune 500 companies are headquarteredhere and 326 Fortune 500 companies have facilities here. Avast majority of the region’s employment is directly linked tofinancial, manufacturing, energy and racing related firms.The strategic location, coupled with the low cost of living,keep people moving to the market.The overall vacancy in the Office market is 15.9%, anincrease of 23% over the past year. The vacancy rate in theCentral Business District is 7.6%, up from 2.1% in 2008.With 2.5 million square feet of new space coming on line,the CBD vacancy rate is expected to climb to 12-13%. Thegood news is Charlotte now has sufficient space available tocompete for major corporate relocations.The Industrial market has been fortunate not to suffer fromover supply. Only two speculative buildings are in theconstruction phase in the entire market. The current vacancyrate is 13.5% which holds its own compared to 12.6%a year ago. Although demand today is weaker than thepre-recession period, brokers report an increased demandin the 20,000 to 50,000 square foot range.Retail vacancies are rising, and landlords are offeringgenerous concessions to attract tenants to their centers.Currently, Retail vacancy is at 8.9%, up substantially from5.7% over the past year. However, it is expected that thevacancy rate will continue to rise into mid-2010. Very littledevelopment is expected until rates level off.Other than a few apartment properties changing hands, theInvestment Market has been extremely slow. This may bebeginning to change as a 1.1 million square foot Industrialportfolio at Crosspoint Park sold for $34.2 million. Therewere multiple bidders for the property that sold at roughly a9.5% CAP rate.Yes, the recession is hitting Charlotte, but we feel the areais in a great position to come out of the downturn strongerthan ever.Total PopulationMedian Age42Total PopulationMedian Age36Asheville At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIAL$$$$$$24.0018.0014.0024.0022.0018.00$$$$$$26.0021.0018.0030.0028.0020.00$ 25.00$ 19.50$ 16.00$ 27.00$ 25.00$ 19.0015.0%14.0%18.0%25.0%22.0%16.0%Bulk WarehouseManufacturingHigh Tech/R&DRETAIL$$$2.003.004.00$$$3.005.006.00$$$2.504.005.0024.0%22.0%20.0%DowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$13.0010.008.0016.00$$$$20.0022.0017.0025.00$ 16.50$ 16.00$ 12.50$ 20.5014.0%9.8%10.0%15.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-park$$$$300,000.00350,000.00150,000.0060,000.00$$$$800,000.00700,000.00250,000.00200,000.00Retail/Commercial Land$ 400,000.00 $ 1,500,000.00Residential$ 40,000.00 $ 125,000.00Charlotte At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$$$$$$$$$N/A17.0012.0018.0018.0012.002.252.406.0010.0012.0020.0021.00$$$$$$$$$$$$N/A22.0016.0022.0020.0016.003.253.5010.0023.0020.0030.0050.00$$$$$$$$$$$$N/A19.0014.0020.0019.0014.002.502.807.0018.0018.0024.0037.00N/A7.0%12.0%10.0%10.0%15.0%14.0%5.0%5.0%5.0%10.0%10.0%10.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBD$ 650,000.00 $ 1,200,000.00Land in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-park$$$125,000.0065,000.00100,000.00$$$250,000.00125,000.00300,000.00Retail/Commercial Land$ 200,000.00 $ 1,500,000.00Residential$ 60,000.00 $ 125,000.002010 Global Market Report ■ www.naiglobal.com 111