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IOS Market Deep Dive: Charlotte

IOS Market Deep Dive: Charlotte

Justin Smith and Greg Gosselin from Colliers break down IOS trends in Charlotte, NC.

Opeyemi Faji & Alex Best
June 28, 2023

BREAKING DOWN THE CHARLOTTE IOS MARKET WITH JUSTIN SMITH AND GREG GOSSELIN AT COLLIERS

The Queen City at twilight.

Charlotte is a key logistic hub along the I-85 corridor which runs from Auburn, Alabama through major cities (Atlanta, Greenville-Spartanburg, Charlotte, Raleigh-Durham) in the southeast before merging with I-95 just south of Richmond. The I-85 corridor is considered the main growth corridor in the southeast outside of the Florida markets. The area has proximity to major southern ports (Savannah, Charleston, Norfolk) that have taken share from the west coast ports due to COVID logjams and labor issues. We caught up with local industrial brokers Greg Gosselin and Justin Smith with Colliers to get their take on IOS trends in the Queen City.

Justin and Greg, who are the largest IOS owners/buyers targeting Charlotte?

There has been a mass influx of investor buyers targeting the Charlotte IOS market. The same IOS investors targeting assets in other Southeast markets that we have all heard of. A few out-of-town investment groups have had success acquiring assets, however a majority of the IOS sites are currently owned by local investors or users occupying the site.

What is the municipal attitude towards IOS uses, and how will that impact future supply?

Local municipalities are not in favor of our local IOS zoning and are hesitant to rezone into the IOS zoning classification. We have analyzed all rezonings since 2018 in Mecklenburg County and there is a net negative supply of IOS land due to multi-family and mixed use rezonings in infill locations near Charlotte city center.

Which Charlotte submarkets show the most IOS activity?

There has been a lot of IOS activity in the North and Stateline submarkets of Charlotte. A handful of sales and lease transactions have occurred over the last 18-24 months that have helped investors and users get a better understanding of pricing for the Charlotte market.

Colliers is listing this 3 acre IOS for lease in the North I-77 submarket. Call for pricing.

What IOS type is most lacking (truck terminal, contractor yards, cross-dock, etc)?

There is a lack of +/-10,000-15,000SF industrial buildings with 3-4 acres of outdoor storage. We are currently tracking 8 active requirements in the greater Charlotte market with these criteria.

Are there any particular amenities or features that IOS users are craving in your area?

Users in the greater Charlotte market are craving a small shop building along with fenced, gated and lit outdoor storage. As I mentioned above, the sweet spot for demand in today’s Charlotte IOS market is a service/shop building between +/-10,000 and +/-15,000SF with around 3 to 4 acres of outdoor storage. The supply is so low with this product type, and IOS laydown yard in general, users and tenants can’t be picky.

Charlotte is a critical hub on the I-85 logistics corridor.

What is the tenant mix between national users versus local SMBs?

There is currently a healthy mix of national users and regional/local small business users searching for IOS today. The larger national users are typically tied to a contract they received or a lease they have with a larger SF footprint in a big box distribution/warehouse facility. The regional/local credit users are typically users supporting the residential and commercial growth of the greater Charlotte market.

Colliers helped Criterion purchase and lease this 19.8 acre IOS in Charlotte.

Any notable transactions that you would like to share?

Colliers | Charlotte simultaneously assisted Criterion Group and a local owner on the sale of 9820 Statesville Rd in Charlotte, a +/-19.8 acre IOS site with a +/-5,000SF office/storage building. Upon the sale of this IOS site, Colliers | Charlotte was in charge of leasing the +/-14 usable acres and successfully signed a 3-year lease to a quality credit tenant at a then high water mark of $6,250/acre/month net. The site was grated, re-graveled, fenced and an updated gate was added to the site only further adding to the value of the asset.

If you want more information on Charlotte IOS trends, reach out to Greg Gosselin at [email protected] or Justin Smith at [email protected].