Duke Energy’s decision last week to reduce its Uptown office footprint from 2.5 million square feet to 1 million stirred up some concern about the future of occupancy for all those tall buildings in the center of Charlotte.
Center City Partners president Michael Smith says it’s important to take a longer view, though.
“One of our foundational companies making that kind of a move is … a dramatic statement,” Smith told me this week. “But I would put it in the context of the fact that we have over 30 million square feet of center city office. And that is a living breathing creature that is very dynamic. It expands and it contracts.”
What’s happening: Duke, which is moving most of its employees to a hybrid model, is building a new headquarters tower essentially across the street from its current headquarters in Duke Energy Center.
- Duke will consolidate its corporate office employees — about 4,400 — in the new 40-story tower at Duke Energy Plaza. Construction is expected to be complete next year.
- Wells Fargo, the owner of the Duke Energy Center building, will likely expand its presence in the tower after Duke moves out. Wells could just keep doing that, or look for another big anchor tenant.
Why it matters: Uptown is the beating heart of big business for Charlotte, and bringing back a considerable workforce to the neighborhood is critical for cultural entities and restaurants and other small businesses.
By the numbers: Before the pandemic, 120,000 people came to Uptown every day to work. And 18 to 19 million people visited for non-work purposes in a given year.
- Then those employees and visitors went home. Today companies are slowly returning to the office, but many are envisioning a hybrid future where people can be at home or at the office, depending on the day.
- The shift to work-from-home or hybrid model comes after the most prolific decade for the expansion of office space in Charlotte history, with 9.6 million square feet added between 2010 and 2020.
- Still the vacancy rate in Uptown offices is only about 10%, Smith says.
Smith is sometimes called center city’s top cheerleader. Few people have done more to promote and develop center city.
- He’s well known for sketching out the series of complicated land swaps that made way for the minor-league baseball stadium that opened in 2014.
This pandemic, though, presented an assortment for challenges for anyone whose livelihood depended on Uptown prosperity. So as soon as vaccines became more widespread in February and people started returning to routines, Smith began the slow drumbeat to let people know Uptown is open for business.
“I’ve spoken to major employers one on one. For their culture and development of tomorrow’s talent and innovation, being together is just so important. They look forward to being back in center city. Because the magic of that place is not its architecture; it’s not even the businesses. It’s the people.”
Flashback: Thirty years ago, when the Final Four was in Charlotte, national media poked fun at the city for not having much to do in Uptown. Over the past few decades, though, as larger corporations have grown here and added headquarters, smaller businesses have popped up around it, creating an economic ecosystem that works together.
- By the 2010s the city was selected to host two political conventions and an NBA All-Star Game, and nobody once worried that any of those visitors would be bored.
Be smart: The glimmering 48-story Duke Energy Center — famous for lighting up in different colors depending on what’s happening in town — was built in the 2000s by Wachovia.
- The 2008 economic collapse occurred mid-construction.
- Wells Fargo purchased Wachovia in October of that year, and Duke soon became the anchor tenant, leasing 22 floors and 500,000 square feet and naming rights.
My thought bubble: The Duke Energy Center is symbolic for so many reasons — for turning purple on nights with Hornets games, blue for Panthers games — but more important than all of that is how construction of it plowed ahead during the Great Recession, leading the way to recovery for the rest of Charlotte. Now we’ll see where it takes us after the great post-pandemic office shift.