Tuesday, January 8, 2013

Charlotte 'the new Austin, Texas' for job growth?

Charlotte was not included among the top 10 markets to watch for commercial real estate during an industry forecast Tuesday.  But the Queen City got some promising nods for its growth potential. A moderator even said Charlotte could be “the new Austin, Texas” in terms of its ability to attract people, create jobs and grow the office market.

Austin, a tech-hub often favored by real estate analysts, ranked No. 4 on the list of hot markets.

Charlotte was also mentioned for its strong apartment market and net migration.

Overall, commercial real estate investors and developers feel more confident about the industry than in previous years, speakers said during a webcast titled “The pulse of the commercial real estate industry,” by PwC. PwC, along with the Urban Land Institute, releases the Emerging Trends in Real Estate, a report based off surveys and interviews, that has highlighted the industry since 1979. The webcast talked about the survey and other trends.

“It’s official, we’re in a recovery,” said Chuck DiRocco, PwC’s director of real estate research. But, he said “it’s recovery anchored in uncertainty.”

Investors have been buying and selling properties in the larger cities, including San Francisco, New York and San Jose, which the survey listed as the top 3 markets to watch. Since the recession hit, investors have favored the larger cities located near ports, known as 24-hour gateway cities.

But the gateway markets have become crowded and prices for prime properties have risen to near pre-recession levels, DiRocco said.

So investors are moving back into the secondary markets, which include Charlotte, Raleigh, Memphis, Portland and Nashville.  Raleigh ranks No. 11 on the list of markets to watch; Charlotte is 17th.

Investors are especially interested in cities that have strong high technology, energy, education and healthcare industries, DiRocco said.

When determining the hot markets, the forecast’s authors focused on markets that can best sustain strong job growth, as well as those boasting strong population growth.  Charlotte got a mention for its strong net migration - ranking 7th out of the 51 metropolitan areas studied.

“Where the jobs are at -- that is where investors are looking,” DiRocco said.

Some economists have recently said Charlotte’s economic growth, as well as the nation’s, has been disappointing. One local economist criticized Mecklenburg County, and North Carolina, for adding jobs too slowly. But there have been promising signs of recovery.

While commercial property prices remain well below their pre-recession peaks, for example, Charlotte’s uptown posted a record year for office building sales in 2012. Brokers sold more than $500 million worth of office buildings, including the iconic Hearst Tower. Brokers involved in the deals say the buyers are national and international institutions.

During Tuesday’s 90-minute presentation, moderators stopped to ask the more than 250 participants to answer survey questions. One question asked people which secondary market they would consider acquiring a stabilized office property in during 2013. Respondents could choose from Denver, Charlotte, Austin and San Jose.

Charlotte was the clear winner, receiving more than 37 percent of the vote, prompting moderator Mitch Roschelle to say “Charlotte may very well be the new Austin, Texas. That is good news in that front.”

In the published forecast, respondents also pinpointed Charlotte, San Francisco and Chicago as “market movers” when it came to new development going forward.

Webcast presenters also addressed the apartment market, which is booming nationally as well as in Charlotte. Rents are forecast to rise, but DiRocco said the industry could be getting overbuilt, possibly by 2014 or 2015.

Nationally, retail has lagged most among commercial properties. The retail industry is still in recession and might move into recovery in 2014, according to the webcast. 

“I think investors remain optimistic. They feel the recovery is real. And I think they feel that commercial real estate continues to offer some of the best risk-adjusted returns,” said PwC's Susan Smith, one of the forecast's authors.

54 comments:

Anonymous said...

Simple answer - no. Charlotte is not the new Austin. I know Charlotte leaders and a lot of people living in Charlotte would like to think so, but it will never be like Austin. End of story.

Anonymous said...

Yes -- We are better than Austin. I know the know-nothings like to complain... but one has to only look at the populations numbers to see that the world view Charlotte in High Regard. End of Story.

Skippy said...

Considering Texas leads the country job creation and it ain't even close, gotta to laugh at this one.

Anonymous said...

Charlotte is basically the opposite of Austin. Austin greatly benefits from having a top notch college in the middle of the city, and enjoys all the benefits that come from it, be it food, live music, world renowned festivals, etc... Charlotte has a fourth-tier state school on the outskirts of town. Austin also has a public school system that makes sense, whereas Charlotte has one the is only concerned about catering to certain special interest groups.

Anonymous said...

But we now have Mayor McCheese as our governor. Surely he will do will for Charlotte. (snicker).

Anonymous said...

I love reading all these anti Charlotte folks. I guess all this population growth was on accident.

Honestly -- if it sucks so bad here, Grad your crap and leave. There will be 5 people moving in for every person who moves out.

I was not born here -- but I am not so dumb that I can't see a good thing when I see it.

You hate the mayor -- that's fine. Me Too - But stop acting like you live in Detroit.

OH - and the next smart guy who says "Charlotte is the next Detroit" -- you better be typing from the Airport because if not, you are just too dumb for words to stay if you are that clairvoyant.

Anonymous said...

Yes -- We are better than Austin. I know the know-nothings like to complain...blah blah blah. End of story.

From Oct. 2010 to Oct 2012, the Austin MSA employment force grew by almost 58,000. During the same time period the Charlotte MSA's employment force grew by just over 47,000. Furthermore, Austin's unemployment rate remains at about 5% whereas Charlotte's is at 9%. Again, NO Charlotte is not the new Austin.

Anonymous said...

Wasn't Charlotte formerly the new Atlanta?

Anonymous said...

OH - and the next smart guy who says "Charlotte is the next Detroit" -- you better be typing from the Airport because if not, you are just too dumb for words to stay if you are that clairvoyant.

Charlotte and Detroit do have one thing in common - high unemployment - Charlotte's unemployment rate 9% and Detroit's 11%. Austin unemployment rate is nowhere near those numbers. :)

Anonymous said...

Wasn't Charlotte formerly the new Atlanta?

Yeah, I think at one point it was also the new Denver, the new Minneapolis, the new Seattle, and the new Portland as well.

Anonymous said...

I hear that purple is the new black.

WestNDNBeauty said...

No, Charlotte is the new CHARLOTTE! I get what they're saying in terms of opportunity, culture, and education. But honestly, Charlotte is BETTER than Austin look at the median family income to that of Austin. There's a lot of talk about us not being a tier-1 city. I don't want Charlotte to be a tier-1 city because I don't want to pay tier-1 city taxes, I don't want the tier-1 city crime and snootiness.

Charlotteans, for the most part genuinely care about their neighbors, their schools, and are readily willing to give back through volunteering. We have big hearts and welcome progress as long as it doesn't cause us to compromise our morals. We work hard and YES we play even harder. I love Charlotte and all this anti-Charlotte attitude has got to stop!

The cost of living here is relatively low, there's lots of quality in education, employement, culture, farm fresh food and stewardship. If we can look inward and find our own nitch, we won't have to worry about comparing ourselves to other cities. So many people move here and it's not because they didn't have other places to go.

We're the big-little city that could and that's that! :-)

Anonymous said...

"From Oct. 2010 to Oct 2012, the Austin MSA employment force grew by almost 58,000. During the same time period the Charlotte MSA's employment force grew by just over 47,000"

Someone should tell the poster that this actually pretty close. Either city gets an A+ for these numbers. To suggest that Austin is "better" because it has more bodies misses the point that both are GREAT stats.

Fine one is A+, the other is just A++ ....

Anonymous said...

Some people just make me laugh.... they think they are so smart because they can read a number off a chart.

Fine.

If unemplyment rate is the BEST indicator of how GREAT an area is --then NORTH DAKOTA is the BEST state because it has a 3% unemployment rate.

Case solved. We now know where to move for the BEST.

wend28 said...

Have to laugh at the negative nellies that hide behind the "Anonymous" user name. The article never said that Charlotte "IS" the next Austin, only that it could be. If you're seriously thinking about comparing Charlotte to Detroit, you haven't been paying attention to the local news or statistics at all lately. Or you just may be mentally challenged. Office vacancies around town are dropping (uptown alone is around 11% which is considered healthy and ripe for relocations), apartment vacancies are low and there is a lot of construction in Southend and several projects in uptown about ready to get off the ground. And lets not forget there are still a ton of people who are moving here, a lot of times without jobs which doesn't always help the local unemployment numbers either. So while Charlotte is not currently Austin for job growth, it sure has all the potential for it. I guess some people have a short term memory in that the last decade prior to the financial crisis that affected the entire country, Charlotte was a big job growth market. But go ahead and deny the fact that this market may be again bursting at the seems. I'll go back to turning away people from my rental properties because the tenants I have won't leave since they are afraid they won't find another place near uptown to live.

Anonymous said...

Charlotte, NC sucks.......the taxes are ridiculous, and the fact that the state has a law against unions or any labor organizations, makes it so employers can treat you like crap. Working here sucks. Low pay compared to other states, and worse working conditions.

Anonymous said...

Frankly speaking...Charlotte is really not all that progressive compared to other cities...Great place to live but in my opinion not a great place to live life..Austin is great....An eclectic city with tons to do.

Anonymous said...

Charlotte is a very conservative city, with many people who have adopted backward ways of thinking. Face it...the city is fickle at best...Definitely caters to married people....not enough to do for singles. Truly lacks diversity. I mean really, when people come to Charlotte what is it for them to do.....Zilch. The city is void of culture and diversity. Where are the plethora of downtown cafes, downtown shopping, all night coffeehouses/ lounges of different genres...Its not here in Charlotte.

luv2travel said...

Charlotte reeks!!!!!....Lets just call it what it is .....A conservative, non-progressive city, not big on diversity that lacks a quality of life for Singles. Charlotte does however have affordable housing though.It's definitely a "married" town for sure. So-called nightlife sucks too...And theres just not enough "GOOD" jobs to keep up with the amount of people that moved here. Sorry but $10 an hr is not going to cut it in today's economy.

Elvis Chainsaw said...

I was in Austin just before Christmas for a week. The answer is no.

Anonymous said...

Not even close. We just lost a major Charlotte area business (Muzak/Mood) to Austin last month. Ask them why they’re moving. Austin has a world-class cultural scene and nightlife that attracts and retains talented, creative 20-somethings. For those young-creatives, Charlotte has no culture. In fact, we’re pretty much devoid of it- save the garden variety stuff you would find in any medium to large town. We’re the 25th largest city in the country yet we’ve added nothing over the last decade to national culture: no music, arts, fashion, recreation, pop technology, culinary trends, etc. We barely keep up with the cutting edge of these things, let alone innovate or lead in any of them. For a 20-something creative, this translates into what I often here from those I employ: “Charlotte s_cks”. In the last few years I’ve lost several of my best and brightest to Asheville and Raleigh. In other cities we compete with (Atlanta, Raleigh, Nashville, etc.) there’s a glut of young creatives running around, augmenting businesses or growing them on their own. Here there are few and those I bring in command higher wages then I would pay anywhere else because of their scarcity. We have plenty of baseball-cap wearing sports fans and bleached-blond sorority girls. That’s fine. We need construction material salesmen and dental hygienists too. But the quirky creatives that go on to start or support companies like Facebook or Google aren’t here because we simply don’t have the culture to draw or even retain them. We may be one of the best cities and most livable cities in the country for older, white-collar workers looking for a “family friendly” environment. And I think we’re a great blue-collar town. But we have nothing for the next Mark Zuckerberg and that leaves a giant hole in our long-term economic picture.

The point made about our lack of top-shelf higher education and the unfortunate distance between Charlotte and UNCC is well made and very true. This also hurts us immeasurably. The city needs a short-term plan to better connect itself (literally) to UNCC and Davidson and a long-term plan to bring a better level of academics here. We’re the only city of anything near our size that lacks both law and medical schools. The overpaid failing “marketing” staff at Center City Partners will tell you that the Triangle-area schools are a feeder. Nonesense. Charlotte is a second choice at best for those grads. The best of them stay in the Raleigh area where there’s a far better cultural scene and a plethora of young tech start-ups. Durham alone has more successful tech start-ups than Charlotte.

If your first reaction to these words is hurt feelings, you’re part of the problem. No city is perfect. Charlotte has a lot to offer but only a coward dwells on that at the expense of addressing problems whose solutions only make that city better. Good is not synonymous with great.

Anonymous said...

Well said. and outstanding post!!!at 6:25PM

Anonymous said...

Fom the Bureau of Labor statistics in November, the average unemployment rate for 372 metropolitan areas was 7.4%.

The Austin area unemploment rate was at 4.9% (rank 50) and the Charlotte area was at 9.0% (rank 309)

That's a loooong way to go from 309 to 50.

Walter Moore said...

As much as I love Charlotte, I have to somewhat agree with Elvis. Visited Asheville over the holidays for the first time in quite a while and was blown away by how vibrant the downtown scene is. Uptown Charlotte by comparison is a ghost town. I don't know what the solution should be to inject a similar cultural vibe...it may possibly start with the blue line extension. I say be patient... Austin didn't build it's scene overnight. I guess that still won't be good enough for some folks.

Anonymous said...

Anonynous 6:25 Outstanding post! You hit the nail on the head!

Anonymous said...

We get it, the Bohemian types (people who never seem to have permanent ties with anyone, any job, or any place) hate Charlotte. Um ok, why on Earth would Charlotte leaders want to target this particular demographic? I'm not saying that Charlotte doesn't have problems because it most certainly does. However, I honestly don't think that a bunch of young hippies is the answer either.

If anything, we first need to encourage folks to get off of unemployment by cutting the benefits. Too many folks that I know are sitting on their arses because the check from the state is just as good as the check they would earn.

Also, we should not forget that "creative class" folks from colleges such as Duke and Chapel Hill have actually built this city from the ground up. These creative types became CEOs and grew small companies such as Duke Power, Family Dollar, and NC National Bank into maga national players. Some of these folks have played a role in growing the Airport into a major hub. You've got guys like the father and son duo behind ventures such as the NC Music Factory. A Univ of Kentucky graduate went bankrupt on his Epicentre idea; an idea that hosted much of the DNC cenvention's media events. I could go on and on.

No No NO, I'm NOT a Charlotte cheerleader because this town does suck for single folks. Then again, if these folks were truly happy and single in NYC, why on Earth did the leave and move to Charlotte? Just sayin. I've got single friends in NYC who complain about the same things that my single friends in Charlotte complain about (believe it or not). One of the biggest complaints are friends of easy girls blocking their advances towards the easy girls. I've learned that "this city sucks for singles" is often a code phrase for "I'm not scoring on the regular being single here, but I don't want to settle down either". No offense, but attractive people (looks and personality) score on the regular whether they're on Earth or the Moon lol, so don't blame the city playa-wannabes out there; blame yourselves.

As for the folks who are complaining about $10/hr wages ROTFLMAO. No offense, but either get a darn skill or use your "creativity" to find yourselves some more money. The true members of the creative class know how to do this; or at least they should.

Last but certainly not least, Charlotte does have a law school (it just moved from Wilkinson Blvd into Uptown), a school of Pharmacy (one of only 3 in NC) is located at Wingate Univ near Monroe, and plans to turn Carolinas Medical into a Medical School with the help of UNC Chapel Hill has been well underway for years. If there is anything of validity that IS wrong with Charlotte, it's the high unemployment rate. That is truly where Charlotte lacks compared to Austin. The other stuff can be fixed for less than what it cost to build an uptown skyscraper. Fixing unemployment isn't that easy.

WestNDNBeauty said...

Patience, patience, patience is what I say to al those "Charlotte's Cultural Vibe Sucks" folk. Austin didn't become the live music capital of America overnight, and NYC didn't build it's reputation for Night Life overnight either. The thing is, you want something, go out and do it. CREATE! Invest in Charlotte, start your own business that will add to Charlotte's "vibe". I think NoDa is a great testament to what Charlotteans and those who move here and love Charlotte can do to add the zing to the city. Quit complaining and create!

mr.perry 40 said...

WestNDNBeauty, I was going to say the same thing, but you beat me to it! It amazes me how people like to complain about how Charlotte lacks this or Charlotte lacks that, but I don't see them lifting a finger to do anything about it! Instead, they want to hide behind anonymous comments on a message board and complain that Charlotte sucks b/c it's too easy to bitch and moan rather than putting any effort behind making things happen themselves! They want someone else to do the work for them while they reap the benefits of someone else's labor! If Charlotte sucks so bad, then do us all a favor and move to Austin, but I forgot, that's going to require a little effort on their parts, too!

Anonymous said...

There is no "new" Austin. Austin is still Austin and growing fast and creating a lot of jobs.

Anonymous said...

I spent over 8 years in Charlotte before defecting to Austin last year. There really is no strong comparison between the two cities.

This is a real estate / development blog, so I think the post is really only describing the similarities in development growth. I was in Charlotte over the holidays and it looks like there is about 35% of the amount of major construction underway compared to the city of Austin. That's better than most of the nation, but it's not on parallel with Austin for the past decade.

It's good to hear the Queen City is improving, but life is too valuable to spend it all in Charlotte. Here are a few things that the city will need while it works to catch up to a city like Austin.

Three major music festivals that generate over $250 million annually

A major Interactive (tech) conference.

A major Film industry conference, with premiere screenings.

Dozens of large Tech companies (Samsung, Google, Facebook, Intel, Dell, Apple, etc.)

Top-tier, international creative agencies

A major Film festival held annually, with premiere screenings.

An annual international sporting event that brings 80,000+ tourists

A huge park connected to the center city

A waterway connected to the center city

A system of trails for recreation that connects to the center city

A major University in the heart of the city

A booming, trend-setting restaurant & dining scene

Entertainment districts where people can stroll (the 3 blocks of Noda hardly count).

A growing Bilingual populace

Recognized Filmmakers, Writers, Producers, etc

Recognized Musicians, Producers, Songwriters, etc.

..and a hundred other things.

Anonymous said...

To the poster at 12:42...How was your employment search before you defected to Austin? As I am looking at leaving Charlotte this year....This city is just not cutting it. Everything you listed was spot on...

Unknown said...

Charlotte isn't the new Austin, but it's alright. Bit more like Dallas, I would say. Yeah, downtown feels a bit "9-5" and it severely lacks in the university department.

Raleigh, on the other hand, could end up being the next Austin.

Anonymous said...

What a joke!!! Austin gained 45,800 jobs from Nov. 2007 to Nov. 2012. Charlotte lost 24,200 during the same period.

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