New deliveries in Charlotte Industrial sector spurring higher vacancy rates

– In 2024, the Charlotte Industrial market has seen deliveries of 8.6 msf, with 74.7% still available. On average over the last 3 years, around 33% of new deliveries have been pre-leased. As a result, vacancy rates have climbed 200 basis points in 2024.

– Currently, the total market vacancy is 7.1%. The 10 largest properties that have been delivered this year make up 63% of total deliveries and remain almost 80% vacant. If half of the deliveries were leased, the vacancy rate would drop to 5.8. Without the new deliveries, the vacancy rate would be much lower at around 4.8%.

– Construction activity is slowing, with 2025 deliveries estimated at about 57% of 2024 numbers, although still about 50% higher than the 5-year average prior to Covid. Combined with tenants in the market seeking around 9 msf in leasing, this slowdown will allow newly delivered properties time to absorb, helping to stabilize the vacancy rate next year.