Uptown Charlotte Real Estate has new hope

Uptown Charlotte has some hope in the uncertainty of the Wells Fargo – Wachovia Merger. The new skyscraper originally known as Wachovia Tower and meant as their crown jewel of Charlotte had a fearful future for many Charlotte area residents until yesterday, when a deal was reached with Charlotte based energy company, Duke Energy.

Duke energy, which helped to create Lake Norman and all of the luxury real estate it compliments, will move its headquarters to the tower and lease 20 of the 48 floors. In doing so, the building will now be known as Duke Energy Center and renew the commitment of Duke Energy to the Charlotte region.

Uptown real estate has been hit pretty hard by the recession with double digit vacancy rates predicted by the end of 2010. This new lease has ensured that at least part of the Wachovia Empire will be used and not left empty like so many other commercial spaces.

Stable and constant commercial growth will inevitably spill into the residential Charlotte Real Estate market. Uptown condos and townhomes, along with outlying communities such as Elizabeth, Myers Park, and Dilworth all depend on Uptown to fuel their home sales.

Rent Falls as Big Banks Move Out

Rent Falls as Big Banks Move Out

With the purposed sale of Wachovia to Citigroup or Wells Fargo in the upcoming months, uptown companies are finding a lot more space for a lot less buck.  Wachovia, which currently occupies over 2.8 million square feet in its uptown 48 story building, will soon be moving to its 1.7 million square foot building once construction has completed.  In turn, uptown will have an enormous amount of space to fill in order to keep profits in margin. 

Currently, uptown has a vacancy rate of about 2% which is comparable to other large cities like Chicago or Atlanta.  But with the purposed takeover of Wachovia’s main operations comes the worry of how much space will be available in the future.  Economists believe that by 2010 the Vacancy Rate will be as high as 10%.  With that much available real estate, it is plausible to expect a huge decrease in home/condo pricing as well as the competitive rental market which exists in Charlotte. 

Another worry with Wachovia leaving Charlotte is that the many purposed future building project which are in limbo with the uncertainty of Wachovia’s fate.   Wachovia planned to build a Cultural Center as part of their new building located at Tryon and Stonewall St.  This would include a theatre, two museums, and a cultural center which if the purposed merger goes through would be at great risk.  It is hoped that with the original contract between Wachovia and the city of Charlotte will preserve the integrity of the new construction of these additions to the Charlotte society and culture.

Citi and Wells Fargo Battle over Wachovia

Citigroup and Wells Fargo Battle over Wachovia

 

The Battle over Wachovia escalated to a new level this weekend when Citigroup Inc. filed a lawsuit against Wells Fargo seeking more than $60 billion in damages for interference with the takeover of Wachovia’s banking operations.

The lawsuit that Citigroup filed on Monday is essentially due to Wachovia’s bad-faith breach of the banks’ contract.  The $60 billion suit is comprised of $20 billion in compensatory damages and more than $40 billion in punitive damages for “tortuous interference”.  

In hopes of avoiding a long costly legal battle, the Federal Reserve has become involved in order to help Wells Fargo and Citigroup come to an agreement over how Wachovia is to be split if at all.  With Wachovia draining assets and devaluing stock, it is essential that an agreement is made soon to help protect investors and clients alike.

One belief is that Wells Fargo and Citigroup will reach a compromise by splitting Wachovia Corp.’s network of 3,346 branches along geographic lines.  Although this may help bring harmony between the two banks, it is unsure what effect it will have on the average consumer.  Perhaps a diversification of Wachovia’s branches may cause some to lose faith in what was once one of the great financial powers of this nation.

Another worry about the proposed Citigroup takeover of Wachovia has to do with Wachovia’s integral component to Charlotte’s local economy.  It is believed that if New York based company Citigroup fully takes over Wachovia’s operations, that it will move its corporate offices taking with it hundreds of jobs.  The effect of such a transition would be extremely detrimental to Charlotte’s local economy which has grown and been partly established with the previous success of Wachovia’s banking and loan procedures. 

The turn of events which led to this arbitration between Wells Fargo and Citigroup In began early last week when Citi agreed to buy Wachovia’s banking assets for $2.1 billion in a deal that was worked out by the FDIC.  Throwing a wrench into the deal, Wells Fargo announced Friday that it would acquire Wachovia in a deal worth $15.1 billion.  Unlike Citigroup, Wells Fargo would not require the assistance of the Federal government to facilitate in the purchase.

It is unsure what affect this entire deal will have on the local home market.  With a slew of Preforeclosure Homes on a rise in the Charlotte Metro area, what is truly needed is a system in place that will help home owners on a local level regain their confidence in our monetary system and bring back a period of growth and not recession.