Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHARLOTTE, NC-The purchase of Crossroads Distribution Center by KBS Realty Advisors capped a month of exceptionally intense acquisition and development activity for North Carolina’s largest city. Four companies, all from outside the area, made 1.8 million sf of industrial acquisitions valued at more than $100 million, and one of them announced plans for an additional three million sf of development.

The KBS purchase represented the Newport Beach, CA-based company’s debut in the market, which KBS senior vice president Robin Burke says has been scouting for the past year and a half. Two of the other buyers also were making market debuts, while the third has been there only 15 months. The new entrants are a joint venture of CIP Real Estate of Irvine, CA and Alex. Brown Realty Inc. of Baltimore, which acquired a $50 million portfolio with 191,736 sf of industrial space and 395,989 sf of offices, and San Diego-based Westcore Properties, which paid $24.75 million for a 455,750-sf manufacturing building. The more veteran buyer is EastGroup Properties of Jackson, MS, which paid $41.9 million for five properties totaling 669,000 sf.

The most recent EastGroup deal succeeds some $92 million and 1.6 million sf of Charlotte industrial acquisitions made by the company in the preceding 14 months. In addition to its acquisitions, EastGroup plans to build up to three million sf of new warehouse and distribution product, beginning with a 95,000-sf building on 9.9 acres at the newly acquired Airport Commerce Center. The company intends to use the city as a base for expansion into Greensboro and the Research Triangle, with plans to open a regional office in the city in coming months. CIP opened a Southeast regional office there in March.

“Even though the real estate market in general is more challenging now, there still seems to be a pretty strong appetite for Charlotte industrial product,” says Ryan Clutter, executive vice president at CB Richard Ellis. “For the three core industrial offerings our office has had in the last few months, we got over 15 bids on each of them. We’re not hearing that happen in too many other markets. That speaks volumes for what’s happening here.”

The investment sales specialist cites the region’s expanding population and strong economy as underlying factors in the market’s strength. He names growth not just at North Carolina ports but at all ports in the Southeast and Mid Atlantic states as another major contributor. “You don’t have to be on the water to benefit from what’s happening at the ports,” he tells GlobeSt.com. “It’s more a regional thing.” Indeed, in March Philadelphia-based BPG Properties announced plans for the North Carolina Port Industrial Facility, a 945,000-sf, Class A warehouse/distribution center on 75 acres at Leland Industrial Park in coastal Brunswick County. The $40 million to $50 million project is located 10 miles from the Port of Wilmington.

According to the Q4 report from CB Richard Ellis, development in Charlotte has picked up significant speed in the past couple years. The market saw nearly two million sf of completions in ’06 and again in ’07, compared to just over 800,000 sf in 2005. Nearly 600,000 sf was under construction at year end, only 12.5% of it pre-sold or pre-leased. Yet despite the increase in development, vacancies dropped from 8.1% in ’05 to 7.2% in ’07. Most importantly, the market absorbed more than three million sf last year, the highest total since 2000 and the second highest total ever. As a result, annual rents rose 3.6% to $4.60 a sf, with projections of a similar increase in ’08.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE Spring 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.