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CHARLOTTE-Morehead Properties Inc. knew it had a good deal in picking up a foreclosed 25,000-sf former fitness center on a 2.4-acre site for $665,000 or $26 per sf. But the problem was how to convert the high-ceilinged, larged glass-windowed court area into rentable office space.

The developer solved the problem by creating a second level with reinforced steel beams. Now the asset is renting for $17.50 per sf. Renovations and tenant build-outs, however, are expected to cost $2.6 million, according to Chris Moffat, Morehead’s manager. The property is in the 432,000-sf Vanguard Park, just off Interstate 77 in south Charlotte.

The second-quarter office vacancy rate in the I-77/Southwest market was 11%, down from 12.5% in the first period, according to Karnes Research Co. The countywide vacancy level was 8% in the second quarter. Average asking rents in this market are $17 per sf.

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