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December 2, 2013

Lincoln Harris Eyes 480KSF Office Project, Amid Strengthening Market Fundamentals

By Eliza Theiss, Associate Editor

Charlotte-based Lincoln Harris has announced plans to develop 480,000 square feet of office space on the former Maersk site in SouthPark, according to a report by the Charlotte Business Journal. Dubbed the Capitol Towers at Carnegie due to design and architecture evocative of Washington D.C., as well as the site’s location on the corner of Carnegie Boulevard and Congress Street, the project is expected to break ground by June 2014. Capitol Towers will comprise two ten-story towers of 240,000 square feet each on a six-acre chunk of the former Maersk site. A seven-story parking deck is planned to the back of the site. Retail space is also in the mix, with the Charlotte Business Journal reporting that the lot’s zoning allows for as much as 15,000 square feet of retail, 5,400 square feet of which will be built between the office towers. Two small structures will also rise at the back of the parking garage.

Lincoln Harris is now seeking city approval for the project and has secured the backing of a yet-to-be-named financial institution to acquire the property owned currently by JLB Partners. The Dallas-based owners picked up the 13-acre former Maersk site in 2012 for $21 million from a U.S Steel and Carnegie Pension Fund affiliate. The Charlotte Business Journal reported a while back that the company intended to sell the eastern part of the site, currently eyed by Lincoln Harris, amid strong interest from office developers, while it planned two-phase apartment construction on the western half. JLB will raise a 350-unit apartment complex in the southwestern corner during phase one. Phase two, set to be built in the northwestern corner, could contain as much as 200 units, the zoning maximum.

While Capital Towers has yet to secure any tenants, developers are confident in building speculative office space, with SouthPark and Charlotte itself currently experiencing a shortage of large blocks of office space for company expansion. Colliers International’s latest data confirms that big blocks of Class A and Class B office space has gone off the market rapidly, although the vacancy for both classes is still in double digits: 13 percent and 15.4 percent. However, net absorptions continue to increase and are expected to continue, with rental rates expected to grow as well, making a Charlotte an attractive market for office development.

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Image courtesy of Google Maps

Chart courtesy of Colliers International

 

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