We've moved!

Our run on Blogger has come to an end, with the Observer's new publishing platform and website. You can find us online at our new home at http://www.charlotteobserver.com/news/business/biz-columns-blogs/development/. See you there!

Retail vacancy, rents vary widely

Real estate analysis firm Karnes recently published its fourth quarter statistics on vacancy rates, rents and inventory in the Charlotte region. The charts show some interesting facts about how local retail space is distributed and how expensive it can be.

First, the vacancy rate (mouse over the columns for exact percentages and figures). Cabarrus County has the lowest rate locally, while northeast Mecklenburg has the highest.


Next, let's look at inventory. Cabarrus County, with the lowest vacancy rate, also has the single largest retail square footage of a submarket (but much less than all the submarkets in Mecklenburg put together). Uptown, with a fairly high vacancy rate, also has the smallest amount of available inventory.


Uptown, with the smallest inventory, also has the highest average rent, at $31.65 a square foot. That could be a barrier for booster groups like Center City Partners that want to draw more retailers uptown.


Here's a map of the Karnes retail submarkets in Mecklenburg.

Want vacant office space? Depends where you look in Charlotte

Charlotte's office vacancy rate dipped 0.1 percent in the fourth quarter, to 14.3 percent, according to real estate analysis firm Karnes. But within different markets, there is a huge variation.

Midtown has the lowest vacancy rate, at 7.5 percent. Uptown, the largest office submarket by far, has the third-lowest rate, at 11.2 percent.

But on the other end of the spectrum, the Park Road submarket had a vacancy rate of 23.3 percent, while east Charlotte's rate clocked in at 25.9 percent, the highest in the city. That means more than a quarter of the office space in that submarket is empty.

Here's how the city's submarkets stack up:


Update: Here's a map with the submarkets broken down.

Statesville Road Marriott still stalled as lawsuits drag on

A half-finished Marriott hotel at Statesville and W.T. Harris roads near Northlake Mall is likely to sit that way for months to come, as the owner and contractor fight over payments and workmanship in court.

Since taking on the development beat, I’ve fielded a half-dozen inquiries about this property. The hotel was supposed to be a 118-room Courtyard by Marriott, and had been slated to open more than a year ago. So I called the owners to see if anything has changed.

Instead, the building has sat unfinished at the prominent intersection right off Interstate 77. The owner, Raleigh-based MJM Group, and the general contractor are stuck in court. The contractor has sued MJM for payment, but MJM has refused to pay because it says the work that was done has severe defects and the building would be too costly to repair.

Meanwhile, many of the subcontractors have filed liens and lawsuits as well, leading to a flurry of cases in Mecklenburg court, but no hotel.

Matthew Lee, an attorney representing MJM Group, said the owner and contractor are set to hold an arbitration hearing in late spring.

MJM bought the land in Sept. 2012 for $1.9 million, real estate records show.

7th Street Public Market now almost a $3 million enterprise

One of Charlotte Center City Partners' biggest pushes is luring more retail to match the influx of people and office space uptown, and the economic development group is holding up 7th Street Public Market as an example of success.

The market opened in late 2011 opening and is now 100 percent leased, officials said at Center City Partners' meeting Thursday.

Sales grew 40 percent last year, and the multi-merchant market came in just under $3 million worth of sales for all vendors. There are a variety of stores at 7th Street Public Market, from a cheese vendor to a coffee shop to a bar with local beer.

The market is located in a former Reid's grocery store, and funded by Blue Cross Blue Shield North Carolina, Carolinas Medical Center, Center City Partners and other businesses (full list here).

Here are some other highlights:

• The market has installed a demo table, with eight classes or demonstrations planned for this month. 
• There's a community room available to non-profits for free, and potentially for other groups to rent.
• The market is offering classes in small business capital funding, payroll and marketing, to further its role as a business incubator.

So, what do you think? Are you a 7th Street Public Market fan? Do you think efforts like this are the key to drawing retail back to uptown?

Crescent Uptown architect posts more details on project

Uptown is set to soon see its first Whole Foods, along with 450 more upscale Crescent apartments. Now, the project's architect, The Preston Partnership, has posted some more details about the project's bells and whistles online.

The company's official project description is on its website. Here are the highlights:

• "The 3.6 acre site includes a 12-story, 116 unit apartment tower over 9 levels of parking, and a 5-story, 332 unit, type IIIA wood frame apartment building, over a shared 2 level parking and retail podium. Crescent Charlotte Uptown offers residents every convenience with over 15,000 square feet of shops and restaurants, anchored by Charlotte’s first vertically integrated Whole Foods Market at 47,000 square feet."
• "Amenities include a stunning saltwater swimming pool with a mixture of private cabanas, outdoor living spaces, fireplaces and outdoor media. The bottom floor of the high rise features a contemporary clubroom for entertaining and social events, a tech lounge with multiple computer stations, and an adjacent amenity building features a state-of-the-art fitness center and yoga room, and an outdoor kitchen with grilling stations. Perched atop the 12 story tower, residents have access to a spacious amenity terrace with panoramic views of uptown Charlotte."

The project is also supposed to include two hotels with 300 to 400 rooms total. Crescent Communities has said it's still negotiating with hotel groups and will announce the hotels later. The company is also buying the adjacent parcel, currently home to Club Caviar, as part of the project.

Big plans afoot around University City light rail

A few weeks ago, I wrote about Carolina States Regional Center's plans for a 37-acre mixed use development with about 1,000 apartment units around the Lynx Blue Rail extension. Now, a separate group is marketing 60 wooded acres across Tryon Street as another potential major mixed-use site, with retail, apartments, offices and a hotel.

The development would be across Tryon Street from the University City Boulevard light rail station and parking garage. The land (map below) is owned by brothers David and Tim McKinney.

"This is the most unique real estate play in all of Charlotte currently," said Tim McKinney. They have a website, www.universitycitygateway.com, set up to market the property, complete with possible site plans.

The land, with Tryon Street on the left.

David McKinney said the intense focus on neighborhoods close to uptown and major apartment develops has caused developers to neglect the University City area.

"I think even some of the developers are a little tunnel-visioned right now," said McKinney. "(The University area) has been overlooked."

McKinney said that's all changing with the light rail extension, which runs right up Tryon Street next to the property. He said the brothers have been receiving a lot of interest in the site, both from local developers and some from out of town.

The land is currently zoned for business, residential and mixed-use. The brothers say it could be rezoned for transit-oriented development - the popular zoning designation that allows denser uses around mass-transit.

David McKinney said they would like to see the parcel developed as one block, but aren't opposed to subdividing it either.