Charlotte Industrial Market Report

Historic additions occur amid upcoming constraint. Charlotte’s restrictive Unified Development Ordinance takes effect this June, which — along with the city’s penchant to incentivize new projects — recently coaxed builders to rapidly submit proposals and break ground on new facilities. Development has risen from under 3 million square feet in 2021 to 13.5 million this year. The 4.1 percent expansion in local stock ranks as the highest among major metros east of the Mississippi River. Record deliveries lift annual vacancy for the first time since 2020, while competition from new facilities pulls rent growth down in-line with historical norms. This should provide some relief to cost-sensitive users looking to set up operations in the area. Nevertheless, space may be generally hard to come by, as vacancy during 2023 will remain below the 10-year mean. A strong pace of household formation and one of the lowest average asking rents among major U.S. metros continue to warrant tenant expansions. Headlining these are Macy's, taking up a 1.4 million-square-foot warehouse in China Grove in August, and Sherwin-Williams moving into a 1 million-square-foot distribution center in Statesville in July.