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There may be a new trend emerging in office buildings: tenants buying the buildings rather than leasing them. For more on this and other business news of the week, Tony Mecia of the Charlotte Ledger Business Newsletter joined WFAE’s Marshall Terry for our segment BizWorthy.
Marshall Terry: Your story focuses on a building in southeast Charlotte. Which one and who bought it?
Tony Mecia: This is a building called INQ @ 2401, which is at 2401 Sardis Road North. It's in the Crown Point area. It was sold to Messer Financial Group. It's a 162,000-square-foot building. Is that newsworthy in and of itself? No, but I think the larger trend that it exemplifies is that we are seeing a lot of these tenants of office buildings buying their own buildings. You and I have talked about some of the troubles in the office market, it's really creating some opportunities for tenants to go ahead and buy the buildings that they're in.
Terry: Why would a business want to buy their space instead of leasing it, giving up some of that flexibility?
Mecia: It’s true they do give up some of that flexibility and a lot of companies that are not in the real estate business maybe don't want to own real estate, but you know, office properties are now falling so much in price that it's starting to make some financial sense. They can get good financing terms, there might be tax advantages. Some other examples in Charlotte, you think of Vanguard, which bought the old Centene property up in University City. They got a good deal on that. So there are good deals certainly to be had. And if you look at the statistics, real estate company JLL says that 20% of U.S. office sales in the first quarter were to tenants, which is up from 15% the year before. Another trend that we reported on, as it relates to real estate that you might be interested in, is warehouses are really starting to go upscale as well. We've talked in offices about how there's this trend toward what they call a flight to quality, of companies wanting better, more upscale offices. The same thing, incidentally, is happening in warehouses, although it's not quite the desire for cappuccino bars and Instagram walls and 24-hour gyms. The defining feature there tends to be what they call clear heights, which are sort of like ceiling heights. It's how much space you can stack pallets onto. It makes it a little more economical. So you see warehouses going upscale as well.
Terry: On to Halloween season, which is almost here. Fans of SCarowinds got some frightening news recently. The amusement park says it’s charging more for its spooky-themed attractions this year. How much more, and what’s behind the increase?
Mecia: Yes, if you want to go into the haunted houses at SCarowinds, where people have the chainsaws and are dressed like Jason and big hockey masks or what have you, it's going to cost $10 more this year. It's a separate charge. Previously, Carowinds has included that in the price of a season pass.
There are people complaining about it online, saying they're being nickel-and-dimed. But really, it seems like it's just an extension of what’s sometimes called à la carte pricing. Instead of an all-inclusive ticket, you pay for what you get. You see that certainly in the airline industry. The larger picture, I think, for Carowinds is its parent company, Six Flags. Its stock is down, attendance is down this year, and that's something that they've blamed on bad weather. But certainly some financial challenges for the parent company of Carowinds.
Terry: Let’s end this week on an update to a story we talked about last year. A giant beehive was found in the walls of St. Matthew Catholic Church in south Charlotte and you report this story has a sweet ending, right?
Mecia: Very sweet. Yes, we reported last year that officials at St. Matthew Catholic Church found a colony with 100,000 bees in it that had apparently been there for about 10 years. The good news is that this last weekend the Church started selling what it's calling Heavenly Honey. [It] requires a $15 donation with the proceeds being used to fight hunger. The church also released a YouTube video by the company that extracted the bees and split the colonies and helped with the honey. The company is called Bizzy Bee Honey, Hives and More. So that is out there for all to see on YouTube.
Support for BizWorthy comes from the law office of Robertson & Associates.
