Hybrid work and high interest rates are creating lots of turmoil for office owners, leaving many empty buildings throughout Uptown Charlotte.
The number of vacancies is expected to double as more loans default and more buildings hit the market later this summer.
"A lot has happened in a short period of time," Barry Fabyan, a marketing director with commercial real estate firm JLL, said.
According to Fabyan, the number of vacancies in Uptown is at a historic level. Nearly 2.5 million square feet of buildings are deserted and almost 5 million square feet are at risk of going vacant.
"I feel there are several at-risk buildings that are already in that situation and more to come," Fabyan said.
Loans are continuing to default, too. The combination of remote workers and higher interest rates is causing loan officers to steer away from new mortgages. Even if you have a promising forecast, Fabyan says it's difficult to secure the funding.
"It's very hard, even if a plan looks attractive, to get a lender to buy in because the tide has moved out for the time being."
He says they're expecting the industry’s recession to last for several years. Those fears have started many conversations about Charlotte's business future with empty skyscrapers hovering over Uptown.
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"Patience will run short very quickly if the building doesn’t look like it’s attractive," Fabyan said. "It's not going to get more attractive over time."
A lot of the buildings are fairly new, and with Charlotte continuing to grow, Fabyan said JLL is optimistic that they'll have a chance to bring life back into these empty buildings.
"There is a lot of studying right now on converting to residential," he said. "A lot of these office buildings, they still have great bones [and] good glass fronts."
As for the immediate future, Fabyan said his firm is seeking solutions to find the right formula for a new opportunity for the right tenant.
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