Here's One Thing You Can Make Out of That Empty Big-Box Store: An Office Hub
Here's one way to fill a former big-box store, especially if it's in one of the fastest-growing work place markets in the United States: A former Walmart in Charlotte, North Carolina, is scheduled to be transformed into a 115,000-square-foot creative office space.
Artesia Real Estate is redeveloping the former Walmart store at 801 E. Arrowood Road, according to a statement from Cushman & Wakefield, which is managing and leasing the project dubbed Arrowood on behalf of Artesia. Artesia, based in Austin, Texas, acquired the former Walmart store in June for $5 million from Atlanta-based White Oak Partners, according to CoStar data. Towne Bank financed the deal for the buyer.
Owners, investors and brokers across the United States are trying to figure out what to do with empty big box store buildings as online shopping cuts the number of visitors to these brick-and-mortar retailers. Industry trade shows are filled with sessions on how to fill the big box, and solutions have run the gamut from slicing and dicing them into smaller retail hubs to different types of uses.
The solution tried by Artesia and Cushman & Wakefield wouldn't necessarily work everywhere. The project's addition of creative office space is key to the region because the Charlotte office market is one of the nation’s strongest, Jesse McConnico, market analyst at CoStar, said in an email.
“With a seemingly endless lineup of major employment announcements, a lot of investors want in on the action,” McConnico said. While new towers are going up downtown and around the South End neighborhood, "some developers have opted to invest in more suburban office nodes, many of which have been redevelopments,” he added.
The success of securing major tenants has stimulated Charlotte’s adaptive reuse market. Duke Energy, Google Fiber, Ally Bank and most recently, Wray Ward, Charlotte’s largest ad agency, have all taken up space in rehabilitated mills and warehouses.
The average rent rate for office space in Charlotte grew 5.4% year-over-year, the third-highest in the nation, McConnico said. And Artesia should know something about high-demand office markets, its hometown of Austin is the fastest-growing office rent market in the United States.
The Walmart deal is not Artesia's first in the Charlotte area. Artesia bought a 200,000-square-foot building at 1801 N. Tryon St. for $8.8 million in November, according to CoStar data. Artesia plans to renovate 125,000 square feet into a creative office space project called General Assembly. Until now, the 86-year-old property has been home to a number of small office, retail and warehouse tenants.
Some of the larger employment announcements include Lowe's decision to open a technology hub in Charlotte’s South End that's scheduled to eventually be home to 1,612 jobs. The hub will be housed in a 23-story, 357,000-square-foot office tower that will open in late 2021.
And in June, Honeywell International Inc. signed a 280,000-square-foot prelease at 700 S. Mint St. in downtown Charlotte. Honeywell will relocate its headquarters to Charlotte from New Jersey, and will relocate and create 750 jobs in Charlotte by 2024.
For the record:
Cushman & Wakefield’s Josh Hammer will lead property management at Arrowood and Andrew Land will lead the firm’s project development services. Jessica Brown and David Dorsch with Cushman & Wakefield will lease the property.
