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Welcome back to our weekly look at Charlotte real estate and development news. Charlotte Commercial Real Estate Whispers is the best way to get the latest dirt on transactions, rezonings and projects happening across the Queen City.
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In today’s edition:
Why, despite corporate jobs boom and population growth, hotel development has been slow to come back post-Covid.
Catching up with CBRE’s new market leader, Denise Dexter, and Brett Gray, whom she succeeds
Demolition order filed for 99-year-old uptown building
One of Forbes’ wealthiest Americans has roots in Charlotte CRE
Two developers will soon pitch plans for historic Huntersville site
A buyer is interested in antebellum farmhouse property
And a wrap-up of land deals and real estate news from us and other sources
Hotel brands are ‘salivating’ to be in Charlotte, but costs are barring many projects from becoming reality
Spandrel Development Partners is leading a conversion of the 400 South Tryon tower in uptown to include a 200-room W Hotel and apartments. (Rendering courtesy of Spandrel Development Partners)
by Ashley Fahey
Hotel development has been rare in Charlotte since the pandemic decimated leisure and tourist travel. Even as travel has recovered over the past six years, deals are tough to get done amid high costs and tough financing.
But last week, New York-based Spandrel Development Partners revealed its plans to bring a 200-room W Hotels to its conversion project at 400 South Tryon. The facade, with its iconic gold-plated windows, will be reskinned, and the 1970s-era tower will be taken down to its frame and its insides completely overhauled to accommodate the hotel on floors one to nine and, on the upper floors, 399 multifamily units.
There’s a lot going on in the area around 400 South Tryon: concerts and sporting events at Bank of America Stadium only a couple of blocks away, and uptown employers that are bringing workers back to the office more regularly. Both trends are driving weekday (business) and weekend (leisure) hotel stays.
But it helps significantly that Spandrel was able to get into the 400 South Tryon building on what the industry calls “a low-cost basis.” While conversions are challenging and not inexpensive, they’re still less costly than building from the ground up.
“In a rising interest-rate environment, it is difficult to make new development profitable and underwrite well,” said Emanuel Neuman, co-founder of Spandrel. “I think that’s why we’re seeing conversions — you can work with an existing structure.”
New construction is extremely expensive, and hotels need to “charge appropriately” to clear profit hurdles, he continued. For many firms, it still doesn’t make sense to do ground-up development.
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