Newer office towers in Charlotte aren’t filling up as quickly as you might think

So Charlotte's office market has a problem that's often described as “flight to quality." That's employers leaving decades-old office buildings in favor of shiny, newer buildings with modern amenities like coffee bars and Instagram walls. Makes sense, right? Especially as a way to lure workers back to the cubicle farms. But is this “flight to quality” really happening? Maybe not quite, according to new data. For more on this and other business stories, WFAE’s Marshall Terry is joined by Tony Mecia of the Charlotte Ledger Business Newsletter, for our segment BizWorthy.

Marshall Terry: What does this data really show?

Tony Mecia: A report that came out this month from real estate firm Avison Young shows that the vacancy rate for office buildings built in the 2020s was 23.7%, and that's higher than the overall vacancy rate for office buildings, even ones that are decades older. Not what you would expect because the narrative from the commercial real estate industry has been: employees are wanting these new office buildings and they're flocking to those. And the problem is that these older office buildings — the ones that are vacant, that you and I have talked a lot about — that nobody wants to be in those. But actually, the data shows that the vacancy rates on those older office buildings — they're lower than the newer office buildings, with the exception of the 1980s, [which] are like 36% vacant. So this really kind of turns on its head a little bit what we have thought of going on in Charlotte's office market.

Terry: OK, so you and I have talked at length about the lack of new office buildings being built in Charlotte right now, largely because of high interest rates. But if the vacancy rates in those newer buildings are actually higher than older ones, is that indicative of a more permanent reason: a lack of demand?

Mecia: Certainly, demand plays a big role in what gets built, right? I mean, if there's a really strong demand, according to economic theory, you would build more office towers. It's a little hard to do now because of the high interest rates that you mentioned, but you know the demand might not be as strong as you would think. It certainly takes time as leases expire in some older buildings for companies to move into newer buildings, but it doesn't seem like these newer office buildings are filling up rapidly or as rapidly as is sometimes implied.

The real question is: How quickly are they going to fill, and when are we going to see a new office tower under construction? It might be a year or two. There's a lot of hope that it's going to be sooner than that.

Terry: Over to some train news now. The price to park your car at the Amtrak station just north of uptown has gone up. How much? And why the change?

Mecia: The Charlotte Observer reported earlier this month that there are now signs up at the Amtrak station that say you got to pay to park. This used to be free parking. The cost is $6 for the first 12 hours and then $5 for each additional 12 hours.

So it winds up being about $10 or $11 a day, and it's capped at $105. And the change is because Amtrak says it's getting crowded. There are too many cars parked, they're parked on the grass, they're parked in places that aren't really parking spaces, and they need to kind of control that a little bit. So the best advice might be to get dropped off or take an Uber.

Terry: Finally, let’s remember an artist whose work includes one of Charlotte’s most enduring and recognized sculptures. What did Arnaldo Pomodoro create?

Mecia:  What he created was "Il Grande Disco." It's a large bronze disc at Trade and Tryon Street. It's been there for a little over 50 years. He died at age 98 last month. He was known for creating bronze discs and spheres that are installed all around the world — also in New York City, at the Vatican and Milan.

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