High Rent, High Potential: A Look into Investment Opportunities in Charlotte’s South Industrial Submarket

By: Joshua Eboh

If you want to invest in industrial real estate, Charlotte’s South Industrial submarket is a hotbed of high rents and growth potential. The area is now commanding average rents of $19.70 per square foot, far above Charlotte’s broader market average of $9 per square foot. But what’s driving this surge in rental prices, and more importantly, what makes this submarket a prime target for investors?

?? A Submarket Set Apart

Compared to the overall Charlotte market, which has experienced steady growth, the South Industrial submarket stands out for its high prices and consistent upward trajectory. Over the past three years, rents have shot up by 30.5%. This reflects local demand and the increasing value placed on industrial spaces close to key transportation hubs and distribution channels.

?? Limited Supply Drives Demand

While vacancy rates in the South Industrial region hover at 15.3%, they have decreased significantly over the past 12 months, dropping by 2.7%. This tightening of available space has resulted in higher demand for what little remains, pushing rents up even further. What’s interesting here is the lack of new deliveries—there have been no new industrial developments in the last year. This supply crunch makes the existing spaces even more valuable.

This event allows investors to capitalize on the submarket’s unique position. Industrial tenants—often seeking proximity to highways, ports, and distribution centers—are willing to pay premium rates to secure suitable space, making any available property highly desirable.

?? Rent Growth: A Look at the Numbers

The South Industrial submarket is enjoying a yearly rent growth rate of 6.5%. This growth exceeds inflation and outpaces many other commercial real estate sectors, making it a desirable segment for those looking to maximize returns. Even in the broader Charlotte market, rent growth is more modest at 3.0%.

If the past three years are any indication, this trend will likely continue. Investors who enter the market now may benefit from current rental income and the appreciation of property values in a fast-growing submarket. With rents rising by over 30% in three years, the potential for further gains is clear.

?? Why South Industrial Is Expensive—and Why It’s Worth It

Several factors make the South Industrial submarket one of the most expensive in Charlotte:

Location, Location, Location: The area benefits from proximity to major transportation routes and distribution networks, which are crucial for logistics and warehousing tenants.

Lack of New Supply: With no new deliveries in the past 12 months, existing industrial spaces are in high demand, driving up prices.

Economic solid Fundamentals: Charlotte has become a magnet for businesses and industries, making industrial spaces highly desirable, especially those in premium locations.

?? The Bottom Line for Investors

For those looking to enter the industrial real estate market, the South Industrial submarket of Charlotte presents a unique combination of high rents, consistent growth, and strong demand. With limited new supply, decreasing vacancy rates, and rents that have increased by 30.5% in just three years, the investment potential is clear.

While the entry price may be high compared to other submarkets, the return on investment—driven by strong tenant demand and ongoing rent growth—makes it a compelling opportunity. Charlotte’s South Industrial Submarket is a submarket where high rent doesn’t just mean high costs; it signals high potential.

#CharlotteInvestments #CommercialPropertyGrowth #RealEstateMarketTrends #HighReturnInvestments #SouthIndustrialCharlotte