News Summary
Charlotte, North Carolina’s office market is recovering as hiring in key sectors boosts demand for office space. In Q1 2025, the net absorption reached 428,289 square feet, supported by significant relocations and decreasing vacancy rates. Despite challenges from the pandemic, the Central Business District shows increased occupancy rates. City officials are considering strategies to tackle high vacancy rates in older buildings, potentially revitalizing the market further. Overall, a positive outlook signals potential long-term growth in the office market.
Charlotte, North Carolina’s office market is witnessing a period of recovery as hiring in key sectors contributes to a growing demand for office space. This positive trend marks a comeback following challenges posed by the COVID-19 pandemic, with significant indicators signaling the potential for long-term growth.
In the first quarter of 2025, Charlotte’s net absorption reached 428,289 square feet, driven by several leases under 40,000 square feet and limited move-outs. This uptick reflects a renewed interest in office spaces as businesses look to expand. Notable relocations, such as Odyssey Logistics moving its headquarters from Connecticut to Whitehall Park, underscore this trend. The company secured the entire fifth floor to support its growth after successfully filling key positions in the city.
The demand for larger office spaces has improved, although it remains somewhat subdued compared to pre-pandemic levels. Nevertheless, signs of recovery are evident, particularly in the Central Business District (CBD), where occupancy rates are increasing. Recent leasing activity includes nearly 90,000 square feet at the First Citizens Bank Plaza, complemented by notable transactions in the Airport and South End submarkets.
Decreasing vacancy rates also reflect this rising demand, falling to approximately 24.6% at the end of 2024 from record highs earlier that year. The overall improvement in vacancy rates is supported by limited supply and two consecutive quarters of positive net absorption, indicating a growing appetite for high-quality Class A office space.
Despite a burgeoning market for office spaces, the capital markets activity remains subdued. A recent transaction involved AT&T selling its occupied building at 200 N. Caldwell St. as part of a national sale-leaseback deal encompassing 74 underutilized properties. Most of the ongoing transactions involve smaller properties or medical office spaces, while transactions for larger buildings have been less common.
There is currently around 840,000 square feet of office space under construction in Charlotte. The local market has faced significant trials in the aftermath of the pandemic, resulting in expectations of a prolonged soft office market. As companies continue to adjust their space requirements, there may be potential for gradual improvements in demand.
A wave of businesses relocating to Charlotte is identified as a key factor that could potentially stimulate demand for office spaces in the future. However, challenges remain, especially for older office buildings facing considerable vacancy rates due to recent construction booms. Many of these older properties, particularly in Uptown, are losing tenants to newer buildings with enhanced amenities.
City officials are actively engaging in discussions to address high vacancy rates within the office market, considering potential partnerships and solutions. Strategies may include studying the issue more deeply, making changes to zoning codes, and implementing incentives for property conversions. The City Council’s jobs and economic development committee is taking a proactive approach to prioritize the situation.
Furthermore, flexibility in zoning codes for older office buildings is being explored, which may encourage their utilization and revitalization. There is a consensus that conversations among community stakeholders are essential in addressing the challenges confronting the office market and ensuring its sustainable recovery.
As the Charlotte office market continues to evolve, the increasing demand for office space amidst hiring recovery serves as a beacon of optimism. If the current trends continue, the market may ultimately stabilize, leading to improved occupancy levels and potential new opportunities for businesses.
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Additional Resources
- CoStar: Job Growth Boosting Office Demand in Charlotte
- Colliers: Charlotte Office Market Report Q1 2025
- Charlotte Observer: Business News
- Encyclopedia Britannica: Charlotte Office Market
- WCNC: Charlotte Office Vacancy Rates
Author: HERE Charlotte
The CHARLOTTE STAFF WRITER represents the experienced team at HERECharlotte.com, your go-to source for actionable local news and information in Charlotte, Mecklenburg County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Lovin' Life Music Festival, Charlotte Pride festival, and major sporting tournaments at Bank of America Stadium. Our coverage extends to key organizations like the Charlotte Regional Business Alliance and Foundation for the Carolinas, plus leading businesses in finance and entertainment that power the local economy such as Bank of America and NASCAR. As part of the broader HERE network, including HEREAsheville.com, HEREGreensboro.com, HERERaleigh.com, and HEREOBX.com, we provide comprehensive, credible insights into North Carolina's dynamic landscape.
