Business Owner’s Guide to Renting Office Space in Charlotte, NC in 2022
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Charlotte, NC has one of the fastest growing economies in the country right now. With so many business opportunities popping up in this city, it can be tempting to lock down your own office space as soon as possible and build your own custom workspace within it.
But it pays to slow down, especially when searching for office space in Charlotte, NC in 2022.
There are a lot of factors to consider (and planning to be had) before you go out hunting for office space; namely, whether you should sign a long-term lease or rent on a month-to-month basis, how much office space to rent, and whether or not you should partner with an experienced commercial real estate broker to assist you with your search.
That said, let’s dive in to this small business owner’s guide to renting Charlotte, NC office space in 2022.
Charlotte, NC Economic Overview & Demographics
Charlotte, NC is the largest city in North Carolina. It has a large number of Fortune 500 companies, including Bank of America and Duke Energy.
In total, there are 37 Fortune 500 firms headquartered in the city. There are also 1,020 non-retail companies located within Charlotte’s borders, with an estimated economic impact of over $30 billion annually.
Partly due to this strong corporate presence, employment opportunities are plentiful here: unemployment stands at 3.8% as of June 2022.
Charlotte Population Demographics
Charlotte, NC is home to over 900,000 people. The demographics of the city in 2022 are 78% White, 18% Black or African American, 2% Asian, and 2% Hispanic or Latino.
In addition to these 900,000 people, a further 2.3 million people live within an hour’s drive of downtown Charlotte.
The average household income in Charlotte in 2022 is about $94,000 annually.
The Three Primary Types of Office Space
Before you start your search, you should decide which type of office space in Charlotte NC you’re looking for: Class A, Class B, or Class C.
- Class A office space is considered newer and of higher quality than Class B and C spaces. Class A office space often demands the highest asking rents and sports the nicest amenities and the most convenient locations.
- Class B office space is not necessarily older or of lower quality; rather, Class B space might require minor improvements and offer fewer amenities or a less convenient location in exchange for average asking rents.
- Class C office space is the lowest grade, yet the most affordable you’ll find. These spaces often require major improvements to be usable, do not provide the best amenities, and have been used before by several tenants.
As your business grows and changes over time, you may need more than one type of office space. For example, you might start out with a Class C office building for a small startup and then move into Class B as your business becomes more established.
Another option is to keep renting and moving up in quality over time. Most businesses will eventually outgrow their early spaces and look for something better.
Office space in Charlotte NC is two-thirds Class A, so you might expect to run into more premium rents for more ideal locations and amenities.
How much does it cost to rent office space in Charlotte, NC?
The average cost to rent Charlotte NC office property in Q2 2022 was about $29 per square foot, down slightly from Q1’s average of about $31 per square foot.
The average cost to rent Class A office space in Charlotte in Q2 2022 was about $31 per square foot, also a decline from Q1’s average of about $35 per square foot.
Despite equalizing market factors, Charlotte’s economy is currently on a growth trajectory due to an influx of new businesses relocating to it. As a result, rents are expected to continue to ride the steady increase they’ve been on since the early 2010s.
What should you look for in a new office space?
Evaluating office space that works best for you and your business doesn’t have to be difficult. The best way to begin is to answer a few simple questions.
- Do you need a high-rise building in a prestigious location?
- Do you need a smaller space that allows you to save money on overhead?
- Are you looking for an established office complex with amenities and close proximity to public transportation?
- Are you looking for something more simple and affordable?
- What are the specific features of the building you’re considering?
- What’s your preferred cost per square foot?
- What kind of support services does it offer your company (receptionist, security guard, etc.)?
- Does it have tenant parking available?
- Does it have state-of-the-art office equipment (video conferencing technology) and technological infrastructure in place?
These are only a few of the questions you could ask yourself that’ll help you get started.
Working With a Commercial Real Estate Tenant Broker
If you don’t like the idea of going about your search on your own, you could enlist the help of a commercial real estate (CRE) tenant broker. CRE brokers are different than agents: They have more experience, more training, access to exclusive market data, and are certified practitioners.
CRE brokers come in three primary flavors: tenant brokers, landlord brokers, and those who offer both (known as dual agents).
Tenant brokers specialize in using their extra training and experience to help tenants find ideal locations, landlord brokers help property owners find ideal tenants, and dual agents do both at the same time (although it may sound shady, this is actually not a conflict of interest).
A tenant broker can benefit your hunt for office space in Charlotte NC by representing you entirely. They’ll take care of:
- The search;
- Handling geographic specialties;
- Lease negotiations;
- Landlord communications;
- And more.
Some tenant brokers may not charge you out-of-pocket, either: Instead, they might collect their fees from the landlord with whom you do business.
Deciding on Your Lease Term & Conditions
Typically, the average office space lease term is about three to five years. While this may not sound so bad to an established business, a startup may look at this length of time as a liability rather than an asset.
There are a few primary types of office leases, with each carrying its own average terms:
- Leasing traditional office space: This is your typical office space that your business rents for itself and only itself, usually the most beneficial for larger teams. Privacy is a primary benefit, with lease terms averaging about three to five years.
- Subletting office space: Subletting an office space involves your business renting office space from another tenant who owns the lease. These leases are usually more affordable than typical office space leases but tend to carry unpredictable terms.
- Leasing shared office space: This occurs when you only need a few desks for a smaller team. These agreements are typically month-to-month and very affordable. Since your team will be working in the same space as another, however, total privacy isn’t usually available.
Working with a broker will help you decide the best lease term for you as well as the best type of lease.
When should you start your search? How long should it last?
You can usually expect your search for office space in Charlotte NC to last anywhere from a couple of months to a year, depending on your specifications, your team, and your current situation.
If you’re already leasing office space, we recommend starting your new search six months before your current lease ends at the very least.
Don’t forget: Your search doesn’t technically end when you find the right space. It can take months for both parties to agree on lease conditions.
Topics like lease concessions, tenant improvement allowances, and term lengths can take the longest to negotiate.
Methodology
All figures presented in this article are based on MyEListing.com’s commercial real estate listing data in corroboration with other freely available data and information covering the commercial real estate industry.
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