Signs of Recovery
Appear In Charlotte

After a wave of mergers cemented Charlotte, N.C.'s position as the nation's second-biggest banking center in terms of assets, after New York City, the economic boom petered out in 2000 as a slump in the manufacturing and transportation sectors helped put the brakes on the region's above-average job and population growth.

Last year the economy began to turn around, and the region gained 26,880 jobs for the 12 months ended in June. The region's overall job growth of 3.5% outpaced the national rate of 1.5%, according to consulting firm Economy.com. The pace of job growth in Charlotte's financial sector remained above average at 3.7% for the year through June, though it has dropped off from an annual rate of 7.5% from 1994 through 1999 and 4.8% from 2000 through 2004.

The Northlake Mall, about 12 miles north of downtown Charlotte, is set to open in September.

Despite the improving job outlook, the commercial real-estate market is just now showing signs of recovery -- though there's plenty of new construction that could temper the rebound. Charlotte's retail market ranks first among the 54 markets tracked by Property & Portfolio Research Inc. for total space in the planning, bidding and postbidding phases as a percentage of inventory, based on information from Reed Construction Data. Planned construction in Charlotte's office market places it 22nd in the ranking, according to PPR, a Boston-based real-estate research firm.

The office sector showed the least improvement in the second quarter compared with the retail, apartment and warehouse sectors, with office vacancies rising and rents falling from the year-earlier period, PPR says, though improvements are forecast for both rents and vacancies. The central business district, known as Uptown, is one of the healthier office submarkets, with vacancies of 8.5% in the first quarter and above-average rents, thanks in part to strong demand from Wachovia Corp., the area's largest employer, and Bank of America Corp., the fourth-largest.

Retail-sector vacancies were stable in the second quarter while rents edged up. One of the largest projects on tap is Bloomfield, Mich.-based Taubman Centers Inc.'s 1.1 million-square-foot Northlake Mall, set to open next month about 12 miles north of downtown. Bill Taubman, the real-estate investment trust's chief operating officer, says the area's growing white-collar population and a median income that is 11.8% above average are increasing demand for high-end properties.

In the apartment market, vacancies fell in the second quarter from the year earlier, though rents -- the lowest of the 54 markets tracked by PPR -- declined.

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