Job growth in Charlotte's technology sector has pushed the city toward the top of the most active tech markets in North America for office leasing activity this year, a new CBRE report states.
Charlotte's high-tech software and service jobs grew 21.3% in 2022, ranking fifth highest, behind Vancouver; Austin; Denver; and Salt Lake City. That is more than double the national growth rate of 10.1%, according to the report.
Raleigh-Durham also ranked high on the list, at No. 7, with 17.1% growth in tech jobs last year.
Charlotte's technology-based workforce is just under 12% of all office users in the market. Contributing to the continued growth is $153 million in venture funding awarded to those companies in the first half of 2023.
Joe Franco, CBRE senior vice president, said many of those fast-growing tech tenants are bringing their employees back to the office full time, fueling activity and demand in the Charlotte office market.
"We can feel the demand difference just in terms of tenant requirements, number of tours and some signed leases," he said. "Not every deal gets done, but you can feel the energy of the tech sector moving in the right direction."
The report, now in its 12th year, measures the tech industry’s impact on office demand and rents in the 30 leading tech markets in the U.S. and Canada as well as other tech-heavy submarkets.
Franco said the companies range from traditional tech to fintech to logistics companies launching and expanding technology-based platforms. He said it's a wide range of tech users, which is to be expected, given Charlotte's overall office market.
Franco said many of the companies are looking in South End, unsurprising, given the submarket's new, Class A product. Others, however, are drawn toward more creative office types.
"South End is definitely a tech hot spot in the market, but I would also tell you there are other parts of town gaining traction" he said. "It's product based, the more creative, adaptive-reuse projects. FreeMoreWest, for example, has seen significant tech traction."
Most of the deals are fairly modest, Franco said, averaging between 5,000 and 25,000 square feet. But what they do want is to be in a space with room for further growth.
"These groups have a tendency to grow quickly, so they’re making office decisions based on what is available within that specific project, within the building, and even within the submarket, to get contiguous space for that continued growth," he said.
As such trends continue, Franco said local projects like The Pearl, Atrium Health's innovation district, will draw in more other technology sectors like biotech.
"These companies will come to the market with projects like The Pearl set to deliver, and it’s going to open Charlotte’s eyes to additional industries we haven't really seen here," he said. "We feel (the demand) daily. With all the folks moving in, tech is going to continue to be a booming sector for office."
