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CharlotteDiscover

Your local market guide.

First Quarter 2019

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Contents

01 Business 4

Employment 6

02 Accessibility 8

03 Living 10

Education 11

04 Research 12

Charlotte Office Observation 14

Office Insight 16

Submarket Insights 17

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Charlotte is one of the fastest-growing cities in America.Forbes

“

The Charlotte region is home to over 2.5 million people and is the 22nd largest region in the United States. Since 2012 the Charlotte region has added 205,000 people or 41,000 a year. It is expected to reach over 3 million by 2030. With a surging population and job growth averaging 50,000 new jobs per year, Charlotte is positioned as one of the most sought-after locations to live and work. Known as the third largest banking center in the nation, Charlotte is also home to the nation’s largest utilities provider, Duke Energy, and is a rapidly growing technology and back office destination. North and South Carolina’s pro-business legislation and relatively low cost of living have proven to be major drivers for corporate relocations and expansions in the area.

An ever-growing region

Charlotte

county metropolitan region - NC and SC

largest region in the U.S.U.S. Census Bureau

4th fastest growing metropolitan in the U.S.

2.5million residents

10 22nd

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The Charlotte MSA offers businesses the opportunity to capitalize on the exceptional growth that is occurring in the Southeastern United States. With a diverse employment base, many companies are choosing Charlotte as their corporate or regional headquarters. The pro-business nature of the Carolinas continues to drive organic growth and relocations.

BusinessWhy companies choose Charlotte

“We are delighted that we were able to find the ideal site for our new headquarters right here in the greater Charlotte region, and the Lash Group looks forward to enjoying continued growth and success here in South Carolina.” ˗ Tracy Foster, President

“Charlotte has been an incredible place for us to attract and maintain top talent to continue to drive our record-breaking year-over-year growth, and provide a world class experience for our more than 5,000 customers.” ˗ Michael Praeger, CEO and co-founder

“Our continued investment in the Charlotte region centers around attracting and retaining the best talent.”˗ Ric Elias, CEO and co-founder

Top 3 employment sectors• Finance

• Manufacturing

• Technology

AvidXchange

Red Ventures

Foreign owned companies in Metro Charlotte

Highest headquarters concentration in the U.S.

950+ 10th

“We are energized by Charlotte’s vibrancy and believe our business is well matched for the community. We believe being in Charlotte and the region will also help us attract talented individuals to the firm.” ˗ David Booth, co-CEO and co-founder

Dimensional Fund Advisors

Lash Group/AmerisourceBergen

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Fortune 500 Headquarters in Charlotte region• Bank of America

• Lowe’s

• Duke Energy

• Nucor

• Sonic Automotive

• Sealed Air*

One of the lowest costs of business than any other major U.S. metropolitan areaWhen it comes to cost of doing business, you can’t get much more affordable than Charlotte in comparison to other major metropolitan areas, thanks to the region’s business-friendly tax approach. The largest corporate expenses, labor and rent, are well below other major markets, making the region an attractive place to expand or relocate major operations.

Charlotte was named #5 Top Metro for starting a business in America, beating out Raleigh, NC; Dallas, TX; and Atlanta, GA. The unemployment rate in Charlotte (4.4%) is below the national average, while the average salary is above that of the national average - all good indicators of the cost of doing business.

State for business in 2017(Forbes, 2017)

Most up and coming cities in America

(Time Magazine, 2017)

Destination for most one-way moving truck rentals

(U-Haul, 2016)

City millenials are moving to(U.S. Census Bureau, 2017)

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1

No.

No.

No.

No.

Fortune 500 companies have locations in Charlotte(Charlotte Chamber) 291

*Sealed Air is the largest corporate headquarters relocation in Charlotte history, in terms of jobs and investment (Charlotte Observer, 2014)

Source: Moody’s Cost of Doing Business Index

Cost of Doing Business

160

120

105

102

101

99

94

94

93

90

89

86

0 20 40 60 80 100 120 140 160 180

New York

Boston

Philadelphia

Seattle

Austin

Chicago

Dallas

Denver

Phoenix

Atlanta

Kansas City

Charlotte

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Charlotte MSA Largest Employers Relocations and Expansions (Last 4 years)

Charlotte, long known for being a banking hub, is continuing to see diversity in its employment mix. Longstanding giants, Wells Fargo and Bank of America, are now competing with healthcare, technology and manufacturing growth in Charlotte.

35,000

16,100

2,400

314

6,747

1,700

2,250

314

15,000

1,500

1,500

300

300

9,976

500

550

250

11,500

1,500

249

9,078

1,400

8,239

630

8,500

8,487

350

Carolinas Healthcare /2014

/2017

/2014

/2016

/2016

/2015

/2017

/2014

/2014

/2014

/2016

/2016

/2016

/2016

/2017

/2014

/2017

Employers CompanyNumber of Employees Number of Jobs / Year Announced

Wells Fargo

Lash Group

LendingTree

Compass Group

Giti Tire

Allstate

Dimensional Fund Advisors

Bank of America Corporation

CompuCom

Amazon

Townsquare Interactive

Verizon Wireless

Novant Health Inc.

Red Ventures

AXA

Spectra Group

American Airlines

MetLife

SiteHands

Delhaize America Inc. (Food Lion)

Sealed Air

Harris Teeter

AvidXchange

Lowe’s Companies Inc.

Duke Energy Corporation

Republic Services

EmploymentDiverse employment growth

Unemployment rate as of January 2018(U.S. Department of Labor)4.4%

Source: Charlotte Chamber, Book of Lists

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Projected job growth

Strong employment growth expected in the future

3.7% Forbes projects that job growth in Charlotte will average 3.7% annually over the next three years

Charlotte has seen a 23% increase in jobs over the last seven years, resulting in the region now having over 1.2 million employees. From 2012-2017 the Charlotte region added an additional 225,000 jobs, averaging 37,000 new jobs per year.

Professional Manufacturing + Construction

Services

62% 21% 17%

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

1,400,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Num

ber o

f Job

s

Year

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AccessibilityCharlotte Douglas International Airport

• #6 busiest airport in the U.S., with 700+ non-stop flights and more than 175 non-stop destinations (2017)

• 4th most connected airport in the U.S.

• All major cities on the East Coast can be accessed within 2 hour flight time

• Over 46 million passengers in 2018

• 2 hour plane ride from 60% of the U.S. population

Non-stop flights to every major American city

Seattle

San Fransisco

Los Angeles

Phoenix

Salt Lake City

Denver

Chicago

Atlanta

NashvilleWashington D.C.

Charlotte DouglasInternational Airport

Charlotte

Philadelphia

New York

Boston

Dallas

Houston

Miami

Orange CountySan Diego

Source: Cltflightmaps.com

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• Intersection of three interstates: I-77, I-85, I-40 provide direct access across all points north, south, east and west

• Two beltways around entire Metro Charlotte: Loops I-485, and I-277

• Six rail lines in Charlotte, with links to 22 states in the eastern United States.

• 25,000 daily Lynx Light Rail passengers

Ongoing expansion

The Lynx Light Rail connection serves the Greater Charlotte area with 33,000 daily passengers.

The Blue Line spans across 26 stations from Pineville, through the heart of Uptown, and ends in University.

The Blue Line offers nearly 19 miles of congestion-free commuting.

485

85

77

277

Highways: I-77, I-85, I-485

LYNX Red Line*

LYNX Blue Line

CityLYNX Gold Line*

LYNX Silver Line*

*Proposed transit lines to be completed by 2031

Strong transportation infrastructure

Easy port connection to the rest of the nation

The Port of Charleston is the busiest container port along the Southeast and Gulf coasts, located nearly 210 miles from Charlotte, North Carolina.

The Charleston Harbor is being deepened from 47 feet to 52 feet to meet the depth requirements of the largest container ships that call into Charleston; this will allow all post-panamax ships to be served 24 hours a day. The deepening project is expected to be complete by 2020. Once completed, the Port of Charleston will be the deepest port on the East Coast.

Source: Charlotte Observer

A Charlotte resident earning an annual salary of $50,000 would have to earn the following to maintain a similar quality of life.

218 days of sunshine

Average high temperature

Exploring nearby

Experiencing Charlotte Sports• Home to 50 craft breweries and cideries

• More than 25 civic and cultural organizations

• Over 210 parks

• 30+ golf courses

Living in Charlotte• 952,529

Total households

• $55,278 Average household income

• 2.15% Median household income growth expectation over the next 5 years

• $1,090 Median rental rate

• 5.75% Personal income tax rate

Fastest growing multifamily submarket in the nation (MPF Research, 2016)#1

71°F

US National Whitewater Center

2 hour drive: Appalachian mountains

3 hour drive: Nearest beach

Football (NFL)

Baseball (MLB AAA)

Lacrosse (MLL)

Basketball (NBA)

Hockey (AHL)

NASCAR

Living

Carolinas PanthersVenue capacity: 75,412

Charlotte KnightsVenue capacity: 10,200

Charlotte HoundsVenue capacity: 21,000

Charlotte HornetsVenue capacity: 20,200

Charlotte CheckersVenue capacity: 8,600

NASCAR Hall of FameCharlotte Motor SpeedwayVenue capacity: 94,000

Source: AACRA Cost of Living Index, Q1 2018

One of the lowest costs of living among other similarly sized East Coast cities

Charleston 54,500

New York124,100

Washington D.C. 81,000

Boston77,100

Miami59,600

Charlotte 50,000

Atlanta 52,000

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High-quality colleges and universitiesMore than 100,000 students are enrolled in higher-education institutions in the Charlotte region, including but not limited to:

Fall 2018 total enrollment: 29,710

Fall 2018 total enrollment:5,813

Fall 2016 total enrollment: 3,810

UNC Charlotte

UNCC

WU

GWU

Davidson College

Lenoir-Rhyne University

Queens University of Charlotte

Winthrop University

Gardner-Webb University

• Named to U.S. News Top 10 Southern Public Schools and Best Colleges for Veterans

• Winthrop was named to Money Magazine’s “Best Colleges” in terms of value

• The University was recently ranked ninth MBA Program in the world

• Gardner-Webb is named #1 Online MBA for Veterans in the Carolinas

• UNC Charlotte has the largest undergraduate population in the state of North Carolina

• 1,000-acre wooded campus is located in the state’s largest metropolitan area

• 77 bachelor’s, 62 master’s, and 23 doctoral degree programs offered through seven colleges

• UNC Charlotte’s undergraduate business programs rank in the top 24% nationwide, according to the 2016 edition of U.S. News & World Report’s Best Colleges

• Low 14:1 student teacher ratio

• Offers 35 majors and 34 minors

• First liberal arts college to eliminate loans in financial aid packages

• Competes in 21 NCAA Division I sports

• Alma mater to 23 Rhodes Scholars

• Low 12:1 student to faculty ratio

• 71% of classes have less than 20 students

• Ranked 16th Best Buy in the South by U.S. News and World Report

• Top 1% among small, private business schools in the nation

• Largest community college in North Carolina

• Over 1,800 associates degrees awarded in Visual and Performing Arts

• Nearly 300 associates degrees awarded in Health Professions

• Affordable, in-state tuition of less than $3,000 per year

Wingate University

Central Piedmont Community College

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Research

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Charlotte Office ObservationsMajor Headquarters announcements, rents & development continue to rise.

• SunTrust and BB&T agreed in principal to merge and picked Charlotte as the future site for their headquarters. In addition, there are as many as five large corporations seeking space within the urban core of Charlotte in 2019-2020.

• Market rents rose for an 8th consecutive quarter. • Construction remains active in the CBD, where Charlotte ranks fifth nationally in square footage

under construction as a percentage of inventory

New Construction to deliver, the majority of it preleased.

• Two marquee developments delivered in South End in the last few months. The first being Stiles Realty’s 63,933 square foot Class A spec building at 300 W Summit. And most recently, Dimensional Fund Advisors delivered their 282,000 square foot East Coast headquarters in South End. Beacon Partners has entered into final stages of development at The RailYard, which is 96% preleased.

• Tenant demand for Class A space in Midtown/South End has driven the development pipeline close to 600,000 square feet of office under development, much of that is speculative. Of that 600,000 square feet, 74% of it is preleased.

The Queen City keeps collecting top accolades

• Charlotte maintains its economic strength, buoyed by a growing labor market. In a recently published study, CompTIA analyzed job growth at the state and city level by sector. It ranked North Carolina 4th in tech job gains year-over-year, and ranked Charlotte 11th on the city level. Last year, Charlotte’s job growth was led by the tech sector, followed by manufacturing and hospitality.

• Job growth, headquarter announcements, and new office developments are adding fuel to optimism that many thought would have subsided at this point in the cycle.

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Market snapshotKey suburban markets healthyNew product is driving up rental values while vacancies remain stable

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Market Snapshot

Source: JLL Research Charlotte

65%

35%

Class A Class B

Total Vacancy 12.3%

Submarket Inventory Average Asking Rent Total Vacancy Under Construction

CBD(Uptown and Midtown-South End) 21,736,892 $34.30 10.4% 2,707,896Suburban 29,506,424 $25.61 13.7% 1,233,615Total 51,243,316 $29.42 12.3% 3,941,511

Class A Rents $31.58

Class B Rents $23.40

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Rental rates

Strong construction pipeline

Class A asking rents experienced a slight uptick in Q1, while Class B remains stable.

Charlotte still ranks amongst the highest in the country for CBD construction as a percentage of inventory.

JLL Charlotte

4201 Congress Street, Suite 300 jll.com/charlotteCharlotte, North Carolina 28209 +1 704 943 2300

©2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.