Speculative building: Some winners, some not so much

This spec building was finished a year ago but still sits empty. Photo: Marty Price

This spec building was finished a year ago but still sits empty. Photo: Marty Price

By Marty Price. Concord Mayor Scott Padgett sees the boom in speculative building as a sign of a strengthening economy that will lead to more jobs in Concord as well as Cabarrus County. “We went from needing speculative buildings to now having more than 1 million square feet of buildings ready with more being built,” he said.

“We went through a down turn, we lost Phillip Morris and we lost the mills, but we have reinvented ourselves with these speculative buildings and with tourism,” Padgett said, stressing that both industries are important to jobs in Concord.

When big companies want to come to a new area, it helps if there are buildings in place that—with slight modifications—can fit their needs and allow them to get up and running quickly.  “Take Amazon on Derita Road. That is a spec building that they moved into,” said Padgett.

Amazon is putting a new distribution center in the 222,500 square foot building built on speculation by The Silverman Group.  Expected to employ approximately 300 people when fully operational, the building is located on Derita Road, near the Concord Regional Airport.

“That airport is an economic engine,” said Padgett.  “The city didn’t have to build the business park out there.  Private businesses have built up around the airport but that extends to other areas, like International Drive, as well.”

Tom McMahon, president and managing director of Cornelius-based Sperry Van Ness Commercial Property Advisors, said that a lot of vacant property along Poplar Tent Road has been sitting primed for development.  “People have been waiting to develop that property for years, but with the economic slowdown, people were holding back.”

“Now they have started releasing the trigger on a lot of different projects.  Because the economy has come back around, the timing is coming around and banks are loosening up a little.  The overall conditions are giving people the comfort level they want to do speculative building,” he said.

Most agree that the speculative building is market specific having varying results for different regions across the nation. Concord, with its infrastructure, proximity to Charlotte and the Concord Regional Airport is one of the markets that is booming.

However Harris Morrison, manager of Harris Morrison Company, a full service commercial real estate company based in Concord, cautions that it hasn’t been a success for everyone, yet.  He believes these buildings will eventually fill but some are moving faster than others.

The 280,000 square feet building at the corner of International Drive and Poplar Tent Road that was finished by Trinity Capital Advisors about a year ago still sits vacant. “Speculation by its nature is risky, but a sign of the times and a vote of confidence in this market.  It’s paid off for some, like with Amazon, but not yet paid off for others,” he said.

Morrison also wants people to know that there is more speculative building going on in Concord that isn’t industrial, but has an impact as well.  Several office spaces in the downtown area were renovated on speculation.  Lofts 29, an apartment complex on the corner of Church Street and Cabarrus Avenue was a renovation that was done on speculation by Rehab Development.

Morrison’s own company rehabbed the old Cabarrus Creamery building on Church street.   In addition to a few businesses on site, they recently opened 14 executive suites, named Synergy Office Suites.  Morrison said all the work there was done on speculation, the suites booked up almost immediately and there are plans for 20 more to be renovated on the speculation that they will fill as fast.

“All these buildings have good access to I-85.  With the new interchange improvements they are all favorable locations,” said Morrison.  “The infrastructure improvements have been the single biggest factor, but there are many others.  There is a great work force here, the cost of living and quality of life are all good here.  It’s a wonderful time to be in Cabarrus County,” he said.

Mayor Padgett said jobs are “No. 1 and filling these buildings will mean more jobs.”


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