Charlotte's office vacancy rate falls while the warehouse vacancy rate rises

The vacancy rate for Charlotte’s office market in the first quarter ticked down to 17.9 percent from the annualized 18.4 percent in 2011, according to the latest report by research firm Karnes.

Demand outpaced supply during the quarter, despite the addition of nearly 22,000 square feet of new space in the Honda Financial Building in Ballantyne.

Charlotte’s suburban market dominated the demand during the quarter, while the Midtown area also posted strong gains as 17,000 square feet of space was removed from the market.

The largest new tenant moves occurred in Ballantyne, thanks to Mitsubishi Nuclear moving into 25,175 square feet of the Hayes Building and Honda Financial Services opening a new building in Ballantyne Corporate Park.

At $21.95 a square foot, average rents are creeping up from lows of $21.77 in 2010. Rents hit a recent high of $22.38 in 2008, according to Karnes.

The Charlotte area has more than 49.25 million square feet of office space in buildings that are 15,00 square feet or larger.

The warehouse and industrial market vacancy rate, meanwhile, rose slightly to 13.4 percent from 13.3 percent reported for the end of 2011. Average rents also dipped to $4.04 from $4.05 for warehouse space and to $8.22 from $8.26 for flex space. The market has more than 43.3 million square feet of warehouse and flex buildings.