Battle of the buildings

They’re two of the biggest buildings — and competitors — in Charlotte.

NASCAR Plaza and Ally Center were built in the same year, 2009, and the two uptown properties contain a total of 755,000 square feet of office and retail space. And while the same company owns them, the buildings battle each other for tenants, each property marketing its own attributes in the struggle to fill space.

“Both buildings are in good locations and very visible, but right now a lot of Class A office tenants are looking at distressed infill properties with a lot of parking outside of  uptown,” said John Nichols, owner of The Nichols Co., a Charlotte real estate firm. “But it’s one of those things that once they start to fill up, they’ll fill up quickly.”

NASCAR Plaza is a 19-story, 390,000-square-foot high-rise at 550 S. Caldwell St., adjacent to the Charlotte Convention Center and the Lynx Blue Line light-rail system.

Indianapolis-based Lauth Group developed the building, but the company fell on hard times in 2009, and the office tower went into foreclosure after Lauth defaulted on its loan.

Charlotte-based Trinity Capital Advisors teamed with Philadelphia real estate investment firm Rubenstein Partners and bought NASCAR Plaza in December for an undisclosed amount, said Leah Bailey, senior leasing agent for Trinity Partners, the sister company of TCA that manages the property. TCA hired commercial real estate firm CB Richard Ellis to lease the office space at the NASCAR Plaza, Bailey said.

TCA also owns Ally Center, a 15-story, 365,000-square-foot office tower at 440 South Church St., Bailey said.

Trinity Partners manages and leases the office space at Ally Center, and TCA hired Merrifield Patrick Vermillion to lease the retail space, Bailey said.

“We made the decision that we’re not really retail experts, and retail matters to the success of uptown buildings, so we reached out to Vermillion,” Bailey said.

‘We’re better positioned’

Bailey said she sees NASCAR Plaza as Ally Center’s biggest competitor, as they’re both new buildings with large blocks of office space.

But Ally has some advantages, including its location, she said. It’s next to the Levine Center for the Arts, home to the Bechtler Museum of Modern Art, the Mint Museum Uptown, the Knight Theater, the Harvey B. Gantt Center for African-American Arts and Culture and Duke Energy Center. The building is also next to Catalyst, a 27-story apartment complex, and Romare Bearden Park, which is under construction along nearby Church and Mint streets.

“We’re better positioned as far as location and access,” Bailey said.

NASCAR Plaza also has Leadership in Energy and Environmental Design gold certification and one of the most efficient floor plans in the city because of its column spacing and rectangular layout, she said.

“More often than not this means a tenant needs less square footage, which is a huge cost-saver over time,” she said. “It’s just another great selling point.”

Charley Leavitt, senior vice president at Charlotte real estate firm Keystone Partners and who has a potential client interested in leasing space at NASCAR Plaza, said that because the building is on the periphery of uptown, it’s more convenient and accessible to people who live in outlaying areas compared with the Ally Center.

“It attracts folks who want to be able to get to their kids’ soccer games faster and easier,” he said. “You can save 10 to 15 minutes a day getting in and out of that building as opposed to buildings closer to center city.”

Ally, meanwhile, has a different appeal with its more central location, he said.

“It’s next to arts and cultural centers and a sports stadium,” he said. “You feel like you’re part of the city at that location.”

Jessica Brown, first vice president for Richard Ellis, said that while NASCAR Plaza and Ally Center have large blocks of office space and were built in the same year, they appeal to different types of clients.

“We (NASCAR Plaza) compete occasionally against them for uptown tenants, but we’ve also had great success in attracting midtown and suburban tenants who are interested in making their first move into uptown,” she said. “Charlotte Regional Partnership, FDIC and Oxner Thomas and Pernar all moved to the NASCAR Plaza from suburban offices.”

She said those tenants like the accessibility of NASCAR Plaza and the fact that it’s immediately off Interstate 277.

“Because of its accessibility, suburban tenants who want to be within the core of uptown would consider NASCAR Plaza before they would other buildings,” she said.

Trinity’s purchase of the building has given it a new lease on life, she said.

“The former owner had extreme financial difficulties, which paralyzed the building for over a year and a half,” she said. “Now the building is very well-capitalized to do lease transactions.”

Rents lowered

Both buildings have reduced their rents since they opened two years ago. Bailey said Ally Center started out between $28 and $28.50 a square foot, and it’s now down to $24.50 to $25.

Ally Center has a 44 percent vacancy rate, with about 163,000 square feet of vacant office space. The building also has 6,976 square feet of retail space, said Keely Lane, director of retail services for Merrifield. City Sundries and Cleaners leases 715 square feet, Lane said, and two restaurant tenants are expected to sign leases within the month for a total of 6,251 square feet.

The building has four office tenants, including Trinity Partners, which moved in December 2009. The biggest tenant is Ally Bank, which between December 2009 and last month moved into the building’s top five floors. The bank occupies 133,000 square feet. The other tenants are HDR Engineering and Public Consulting Group.

Brown said NASCAR Plaza started out at $29.50 per square foot but is now at $24.50. The vacancy rate is 61 percent, with 241,107 square feet of office space unoccupied. There’s 3,800 square feet of retail space, 600 of which is occupied by a sundries shop.

The building has eight tenants, she said, the biggest being NASCAR Media, which occupies 110,000 square feet. Other tenants include Charlotte Regional Partnership, Federal Deposit Insurance Corp., Oxner Thomas and Pernar, Just Marketing International and aluminum producer Alcoa, which signed a lease in January.

Role of banking, energy

Nichols said that one thing both buildings have working in their favor is Charlotte’s banking and power-generation industries, which each have companies with uptown headquarters.

“This will help attract auxiliary businesses and create more jobs and fill up some of the vacant space uptown, and we need the city’s core to be strong,” he said.

Leavitt said that while both buildings are attractive and in good locations, opportunity and timing are more critical than location in the current market.

“A lot of companies that would have interest in these properties are in a lease right now,” he said. “If you have two years left on your lease, it doesn’t matter if NASCAR Plaza has space available because you can’t take advantage of it.

“Both buildings need interested companies with leases that are getting ready to expire in 18 months or less.”

Sam Boykin can be reached at [email protected].

NASCAR Plaza

Address: 550 S. Caldwell St.

Size: 19 stories, 390,000 square feet

Rent: $24.50 per square foot

Vacancy rate: 61 percent

Tenants: NASCAR Media, Charlotte Regional Partnership, Federal Deposit Insurance Corp., Oxner Thomas and Pernar, Just Marketing International and Alcoa

Ally Center

Address: 440 South Church St.

Size: 15 stories, 365,000 square feet

Rent: $24.50 to $25 per square foot

Vacancy rate: 44 percent

Tenants: Trinity Partners, Ally Bank, HDR Engineering and Public Consulting Group

Source: Mecklenburg Times staff research