Meck office rents up, vacancies down compared with before the downturn

CHARLOTTE — Rents for all classes of Mecklenburg County office space — A, B and C — are higher than they were in 2007, the year the Great Recession began, according to Charlotte-based Karnes Research, which tracks the county’s office market, but only activity in buildings that have at least 15,000 square feet of space apiece.

Andrew Jenkins, managing partner for Karnes, said that since 2007, the average Class A rent has risen in the county to $23.27 from $22.11. Rents rose for Class B to $19.32 from $18.83 over that same period.

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That means Class A rents rose 5.2 percent during that time, while Class B rents increased only by half that much.

So far, though, the vacancy rates — at least those from Karnes’ — aren’t showing a huge increase in demand for the county’s Class B space.

According to Jenkins, at the end of 2012 the county had a 21.17 percent vacancy rate in the Class B market. That’s down from 21.27 percent at the same time in 2011.

Karnes’ numbers show a much stronger recovery taking place in the county’s Class A market.

According to Jenkins, Class A space has gone from an average vacancy rate of 17.3 percent at the end of 2011 to 16.1 percent at the end of 2012.

As for demand for existing space, last year 1.27 million square feet of space was absorbed across the county’s Class A, B and C markets, Jenkins said. Also last year, a total of just less than 1 million of square feet of new office space was added to the county, he said.

“Relatively speaking, we’ve had a good demand market compared to the amount of supply that was delivered,” he said.

ROBERTS can be reached at [email protected].