MARKET SNAPSHOT: Employment and Occupancy Expected to Rise in Charlotte Despite BofA Job Cuts
By Philip Shea, Associate Editor
Employment in the Charlotte metro area is expected to increase over 2 percent in 2012, forcing occupancy and rent prices to make similar strides. Vacancy will settle just above 6 percent as construction in the city is expected slow, producing well under 1,000 new units.
Marcus & Millichap expects there to be significant growth in the education in health services sector, while blue-collar job growth is expected to tighten. Furthermore, demand for high-end units in the downtown area is expected to decrease as financial firms begin to trim payrolls.
Perhaps the most profound development in the Charlotte job market will be the elimination of tens of thousands of jobs by Bank of America through 2014. According to the Charlotte Business Journal, the financial behemoth said it will cut 30,000 jobs during this time in an effort to trim expenses and improve performance. The Charlotte-based bank hopes the layoffs will result in savings of around $5 billion.
Jerry Dubrowski, a spokesperson for Bank America, recently told Forbes that the 30,000 employees it is prepared to let go were “hired in 2010/11 for mortgage-related services activities” and warned against “thinking about businesses as silos.”
Yet even with such a sizeable economic headwind stemming from the layoffs, Marcus & Millichaps projects that 17,000 positions will be added to Charlotte this year alone, up from 5,000 in 2011. The Charlotte Business Journal reports that the same number of jobs were added to North Carolina overall in January 2012.
Multifamily investment activity is expected to remain strong in 2012, as institutional investors will likely set their eyes on Class A properties in the central part of the city. Meanwhile, local investors may be enticed by low interest rates to venture into the city’s suburbs, acquiring value-add Class B and C properties.
Average asking rents are expected to rise 3.5 percent to $816 per month, with average effective rents making much bigger gains of 4.6 percent—translating to $753 per month. This trumps last year’s gains of 2.7 percent and 3.9 percent, respectively.
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