The rental market in Charlotte is showing signs of softening, and David Tepper's company is offering up the 245 acres that was supposed to be the site of the new headquarters for the Carolina Panthers. WFAE's Woody Cain speaks to Tony Mecia of the Charlotte Ledger business newsletter for our segment BizWorthy on these topics and more.
Cain: Housing prices in Charlotte have been on an upward trajectory, but that might be changing, at least in part of the market. For more, we turn now to Tony Mecia of the Charlotte Ledger business newsletter for our segment BizWorthy. So, Tony, ever since the pandemic began, we've been seeing reports about the cost of housing going up. But a new report says there may be some relief. Is there, in fact, a light at the end of this tunnel?
Mecia: Well, I think, Woody, over the last couple of years, we've seen a tremendous increase in apartment rents and housing prices and the demand for housing in Charlotte. A lot of that was sort of pent up coming out of the pandemic. We are starting to see now some of it slow down a little bit. That doesn't mean that prices are decreasing. They're just not increasing as quickly. At the Ledger, we got some data from Costar Group, which is a real estate data company, that shows that apartment rents in Charlotte in the third quarter were actually lower than they were in the second quarter. That hasn't happened in two or three years. So there's definitely a cooling off going on. The prices year-over-year are still up, but they're not up double digits like they had been. They're only up in the high single digits. So we are seeing a little bit of that softening in real estate, both on the for sale side and on the apartment rental side.
Cain: Meanwhile, we seem to talk about restaurants an awful lot and we keep seeing stories about restaurants closing or moving, especially in the Plaza Midwood area where they're saying, "I can't pay my rent, the rent is raised and I can't pay it anymore." Is there any relief on the business side of the equation?
Mecia: I think the same dynamic is happening in all parts of commercial real estate. I think you're seeing that in retail. I think you're seeing it in office, where some of these upward pressures have really sort of lessened a little bit at the stage that we're in in the economy. Inflation has been high over the last couple of years. And, you know, you talk to some analysts and they just say it's just not sustainable for these rents to continue growing even in a growing market like Charlotte. So I think we probably are seeing some relief in other sectors of the economy. We've always had restaurants closing and new restaurants opening. So some of that is just, I think, natural churn. But certainly, you know, there have been some high-profile closings, no doubt.
Cain: One of the ones that was an eye opener, I know it's kind of apples and oranges, but Centene last month said they're not going to go forward with their headquarters project in the university area. Did that kind of make some folks open their eyes a little bit and say, wow, maybe we need to rethink this?
Mecia: Well, the office environment is something that is challenging for a number of different reasons. You know, we still have this remote work, these hybrid schedules. A lot of companies are trying to figure out what exactly their real estate needs are if they have people working in the office only half time. Do they still need the full amount of office space that they had? And the thinking is that maybe they don't. And as their leases come up, they might pull back on it. At the same time, Charlotte is a growing area. We're attracting new businesses here. And so, you know, even if some of the companies pull back what they use in office space, that might be backfilled by new companies showing up. So it's certainly a dynamic market, certainly something to watch. There are a lot of complexities to it.
Cain: I wonder if it might be a bellwether that David Tepper's company is now offering up the land that was supposed to be the site of the new headquarters and practice facility for the Carolina Panthers before all that fell through? What's the latest in Rock Hill? And could this kind of give us an idea of where things are headed? I mean, is it a case of, if you need 245 acres in Rock Hill, 'Have I got a deal for you'?
Mecia: Yeah. I'm not personally in the market for 245 acres in Rock Hill. I don't know if you are, Woody, but somebody might be. I mean, this is land that the Carolina Panthers bought a few years ago, I think for about $15 million. There've now been a bunch of improvements to that land. It's been cleared. It's been built on. The state of South Carolina is building an interchange right there. So it could be a much more attractive property for the right buyer. The real estate company Colliers has it listed for sale. They would like to sell it all in one chunk. So what that would look like, exactly, still remains to be seen. But, you know, projects of this size a lot of times have multiple uses. You could see maybe some residential, some office and some retail, again, right off the interstate. You know, it's certainly attractive for somebody, but not for me.
Cain: Or me. And we'll find out who might participate in that down the road as this story continues forward. And finally, Tony, the Ledger has a story about the future Charlotte campus of the Wake Forest University School of Medicine over in the Dilworth/Midtown area. This thing is coming together pretty quickly. What can we expect to see in the next few weeks or months?
Mecia: Yeah, they've started demolition now on that site, which is on McDowell Street and Baxter Street right there in the Dilworth/Midtown area, right outside of 277. It's going to, I think, come together fairly quickly. The land was rezoned earlier this year. There were going to be office buildings. Atrium Health sees it as a super-magnet for innovation and economic development. They say that the first class of four-year medical students should arrive next year in a temporary facility and that this new site should be up and running by 2024.
Cain: It doesn't seem like there's much slowing down on the health care side of the equation, right? I mean, they're going like gangbusters almost everywhere, it feels like.
Mecia: Yeah. That whole area, if you look down that Morehead corridor headed toward uptown Atrium has really been growing toward uptown. They have a number of new office buildings there, a bunch of apartments going into that area. I think in a few years, that whole area is going to be really transformed. You're going to see not just Atrium and Wake Forest with their medical school, but you're going to see a lot of other companies, I think, moving, wanting to be close to that, and then residential. So that certainly is a hotspot and, you know, not too far from South End. So certainly a lot going on in that area.
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