CBRE Investment Management’s CBRE Strategic Partners U.S. Value 9 has added The Line, a newly developed office asset in Charlotte, N.C., to its portfolio.
In a joint venture agreement with Portman Holdings, developer of the approximately 314,000-square-foot responsive office building, CBRE Investment Management acquired The Line for an undisclosed amount. According to notes from an RFQ Portman submitted in late 2021 for another project in North Carolina, the office property cost $155 million to develop.
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Located at 2151 Hawkins St. in Charlotte’s burgeoning South End neighborhood, The Line occupies a 2-acre site that Portman purchased in 2018 in a then-historic transaction of $12.7 million, or $470 per square foot. The 16-story tower, a partnership endeavor with National Real Estate Advisors in the role of owner, delivered in late 2021 with the assistance of a $95.6 million construction loan through PCCP.
The Line encompasses roughly 290,000 square feet of premier office space, 24,000 square feet of retail offerings and a host of extras within close proximity of light rail. Boasting features ranging from LEED Silver and Fitwel certifications, touchless elements and electric car charging stations, the Gensler-designed The Line is a paradigm of the post-pandemic modern workplace. And as a responsive and productive office property, it anticipates the needs of its users and sets the stage for a more productive workforce. The Line appears well-positioned to find an audience in the transitioning office world.
What workers want
With the pandemic not quite in the rearview mirror, there are few markets in the U.S. where tenants are clamoring for office space, but CBRE Investment Management, formerly CBRE Global Investors, is undaunted by the prospect of leasing up The Line. After all, Value 9, which completed its final closing in August 2021 with $2.3 billion of equity commitments for a total purchasing power of $5.6 billion, is a value-added fund. And The Line has a few pluses on its side in terms of luring would-be office users.
“We believe The Line will be attractive to tenants as it offers the right user experience and is in the right location,” Sondra Wenger, head of Americas Commercial Operator Division for CBRE Investment Management, told Commercial Property Executive.
“The property offers sophisticated amenities, including plenty of shared spaces—such as a sky lobby, open-air plaza and green lawn—the latest in technology, and a focus on health and wellness. In addition, within a three-block radius to The Line, there are 28 restaurants, 13 retailers, six bars, five coffee shops, two grocery stores, the Rail Trail and almost 3,000 multifamily units, making the neighborhood the property’s strongest amenity.”
Despite Charlotte’s lackluster office conditions—the vacancy rate was 17.2 percent in the first quarter of 2022 and the market recorded approximately 360,000 square feet of negative net absorption, according to a CBRE report—the flight to quality is spurring strong leasing activity in the metro. Additionally, at 10.4 percent, the South End had one of the lowest vacancy rates of all the submarkets in Charlotte in the first quarter of 2022, and it is also one of the few submarkets that recorded positive net absorption in the first three months of the year.