Has Charlotte’s construction boom gone bust? The number of new apartments started last year hit a five-year low. And the start of construction on new office buildings, retail and restaurant spaces was the lowest it’s been in more than a decade. That’s according to new data compiled by CoStar Group. And joining me now to talk more about it is the Charlotte Ledger Business Newsletter’s Tony Mecia for our segment BizWorthy.
Marshall Terry: So what’s behind all of this, Tony? It still seems like there's plenty of new construction when you drive around.
Tony Mecia: Yeah, that may be Marshall. I don't know. It seems to me like maybe there's not as much as there used to be. And also a lot of the big projects that are out there, they weren't started last year. A lot of the biggest ones were started in '22-'23 and are just now finishing up. A lot of the slowdown has to do with higher-than-usual interest rates. And when those interest rates get higher, the investors don't put as much money necessarily into real estate. They have more flexible options, options that might give them better returns. And so that's kind of steering a lot of money out of the sector and making it harder for developers to finance some of the projects that they would like to build. Even though, as we all know, Charlotte is growing, needs more housing, that sort of thing,
Terry: Developers are usually optimists, you have to be to bet it all on a new building over and over. But what are you hearing about the year ahead?
Mecia: Yeah, a lot of developers that I've talked to are hopeful that things will be better this year. I think they're also a little bit realistic that if this is going to depend on lower interest rates, the Fed has said it's going to go very slowly in lowering those interest rates. And so we might not be back to those sort of boom boom times that Charlotte has been accustomed to. It might be a little slow going, but they're hopeful that it's going to be better than 2024.
Terry: All right. Let’s move over now to the business of medical care, which has been very profitable for Atrium Health. The state’s largest hospital system this week announced record revenues. Just how much were they?
Mecia: Yeah, Atrium Health said this week at a board meeting that its operating revenue for last year was $12.6 billion. That's 35% more than in 2023, and it's a new record. The health system said that in Charlotte the number of visits overall was up about 5%. A number of different categories also saw some pretty big gains. The number of births they said was up 5%, the number of surgeries, up 9%, and they've seen strong patient demand in areas such as oncology, cardiology, and women's and children's health.
Terry: Finally, one of Charlotte's most well-known companies, Belk is the latest telling its corporate workers. They have to come back into the office three days a week. It had seen Belk had embraced remote work and, at one point, was even looking to sublease its headquarters on Tyvola Road. So what changed?
Mecia: It's hard to know for sure what the company's rationale is. In a statement that Belk provided to the Charlotte Ledger, it said that it was switching course that it would ask employees to come back three days a week. This is even though Belk, a few years ago, right after the pandemic said it was embracing a fully remote workforce for its corporate headquarters. They had hired some people on that were outside of Charlotte even, and now they're asking those folks to relocate to Charlotte. So it's unclear exactly why. Certainly, there's been a movement toward getting more employees back in the office. A lot of employers believe that workers when they're face-to-face can collaborate more and that they're more productive. It's something that a lot of companies are grappling with, and so Belk is changing course and bringing some of those folks back.
Support for BizWorthy comes from the original Mattress Factory and our listeners.
