Kimco Realty Market Profile: Charlotte, N.C.
The next MSA I want to highlight in our Market Profile series is Charlotte, N.C. We started investing in the Charlotte-Gastonia-Rock Hill MSA in 1968 and have acquired 854,391 square feet of leasable space across seven properties. Charlotte is showing strong economic activity and solid growth projections, which is why it’s one of the 31 MSAs in which Kimco invests.
Population is a key factor driving this strength. The Charlotte-Gastonia-Rock Hill MSA has an estimated population of 1,810,068 people, according to data obtained through SitesUSA, making it the sixth largest MSA in the United States. According to the Charlotte Chamber of Commerce, there are 7.3 million people living within a 100 mile radius of the city. This is in excess of Miami’s 6.0 million and not far behind Atlanta’s 8.3 million. Charlotte’s population is projected to grow to over 2 million people by 2016, with a projected annual growth rate of 2.3 percent, surpassing the U.S. annual growth rate of 0.8 percent.
|Median Household Income:||$55,102|
|Median Home Value:||$126,180|
|Median Household Income:||$53,657|
|Median Home Value:||$119,582|
Source: Data obtained through SitesUSA
In addition, by year’s end, Charlotte is projected to recoup over half of the jobs lost during the financial crisis and recession, according to Marcus & Millichap’s Retail Research Market Overview for the second quarter 2012. The report found the economy gained 11,000 jobs in the past 12 months, and forecasts that employers will add 13,000 jobs by the end of 2012. Overall, the Charlotte MSA employs an estimated 778,000 workers at 66,210 businesses, according to data obtained through SitesUSA.
There are several major industries in Charlotte. Many people know the area for its auto racing industry, which continues to be vibrant. NASCAR has offices in Charlotte, as well as three other North Carolina cities, including Mooresville, Concord, and Conover. Most NASCAR teams are based in and around Charlotte.
Many people don’t know Charlotte is also a major U.S. financial hub, and is the second-largest banking center in the United States after New York City. Bank of America, the second largest financial institution by assets, finds its home in Charlotte, along with the East Coast operations of Wells Fargo. (As an aside, Charlotte is also home to the first discovery of gold in America — roots perhaps to its now strong financial industry.)
The Charlotte MSA also has large healthcare and technology sectors, which are expected to generate many new jobs this year. Novant Health, an integrated healthcare system with over 13 hospitals and 355 clinic locations, leads the healthcare sector. Red Ventures and RATO North America head the technology sector in job expansion. Marcus & Millichap’s Retail Research Market Overview forecasts that Novant Health, Red Ventures, and RATO North America will create 1,700 new jobs by 2013.
Jobs such as these fuel high incomes for many households. In fact, approximately 23 percent of households have incomes of $100,000 or more, according to data obtained through SitesUSA. On average, the Charlotte household brings in $75,530, surpassing the national average of $73,458 per household.
It appears this translates into slightly more disposable income, which consumers can spend at retailers. Data obtained through Sites USA finds Charlotte’s average household expenditure is $57,233, above the national average of $56,157 per household.
In the retail sector, the Charlotte market’s vacancy rate was 8 percent at the end of the second quarter of 2012, according to The CoStar Retail Report. Effective rents increased 0.3 percent in the first quarter of 2012, landing at $14.95 per square foot, according to Marcus & Millichap. The organization foresees a continued uptick in effective rents for the remainder of 2012 to $15.02 per square foot.
According to The CoStar Retail Report, the shopping center market in Charlotte currently consists of 1,115 projects with 51,091,669 square feet of retail space in 2,125 buildings. J.C. Penney, Burlington Coat Factory, and Walmart are among the retailers expected to take up new space in the Charlotte MSA in 2012.
Our most recent acquisition in the Charlotte market is Woodlawn Marketplace, which Kimco acquired on July 13, 2012. This center is anchored by Home Depot, Burlington Coat Factory, CVS, and T.J. Maxx. In total, Kimco has seven properties in the Charlotte market. They include:
- Tyvola Mall in Charlotte
- The Centrum in Pineville
- Charlotte Sports & Fitness Center in Charlotte
- Woodlawn Marketplace in Charlotte
- Jetton Village Shoppes in Cornelius
- Mountain Island Marketplace in Charlotte
- Davidson Commons in Davidson
The Charlotte MSA continues to strengthen economically. Its growing population, industry, and retail market signifies it’s a solid choice for retail real estate investment.
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