As construction shatters records in Charlotte, deliveries lag in supplying new product
The construction pipeline in Charlotte continues to break records, with 21.2 million square feet (msf) recorded in the first quarter of 2023. That resulted in a 51% increase in construction year over year. Despite the massive increase in space under construction, deliveries have yet to catch up, with only 0.5 msf completed year to date. Construction back logs caused by supply chain disruptions and economic uncertainty are a factor as to why deliveries are delayed and not meeting demand. The I-485 Logistics Center in the Airport submarket that was preleased by Fontaine was a significant project, delivering 150,000 square feet (sf) for Building #1 in the first quarter. The lack of supply has caused many occupiers to prelease space, totaling 26.4% of construction. Trends follow closely for net absorption as it has steadily declined for the past 12 months. As absorption continues to outpace deliveries, this shows demand is still outpacing supply.