A rendering of the new building at 620 South Tryon. LS3P, Hal Shute
A rendering of the new building at 620 South Tryon. LS3P, Hal Shute

Development

What’s new in commercial and residential real estate in the Charlotte region.

Development

Bank of America leasing half-million square feet in new tower at former Observer site

By Ely Portillo and Rick Rothacker

elyportillo@charlotteobserver.com

rrothacker@charlotteobserver.com

April 07, 2017 01:00 PM

Bank of America will lease more than half of Lincoln Harris’ new office tower under construction, consolidating employees and kicking off the first part of the biggest new development uptown in decades.

The 33-story building, located at the northeast corner of Church and Hill streets, will sit on part of the former Charlotte Observer site.

Bank of America CEO Brian Moynihan told the Observer the bank has signed a lease for about 500,000 square feet in the tower, which it expects to occupy in late 2019. The bank’s name and branding will be displayed on the building.

“It’s another major commitment to Charlotte,” said Moynihan.

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The new office space will give the bank the chance to consolidate many of its client-facing employees who serve customers in the Charlotte market in one place, such as corporate bankers and wealth managers, he added.

“We have a corporate headquarters building, and these teammates that serve the market are interspersed in that building,” said Moynihan, who said the move won’t drive an increase in the bank’s 15,000 employee headcount in Charlotte. “The goal of this facility for us is to put all our market-facing teammates in the market in one building.”

In a message to employees sent Friday, Charlotte Market President Charles Bowman said the move “will focus on bringing together client-facing teams, enhancing our ability to deliver one company.” A bank spokesperson said it’s too early to say whether the move means Bank of America will vacate other space it leases in Charlotte.

Bank of America’s new building is a block away from Bank of America Stadium, where the Carolina Panthers play, and adds to the growing wave of development that’s completely reshaping a mile of Stonewall Street.

The new building also gives Bank of America a major presence south of Trade Street, an area that for years has been dominated by rival First Union and its successors Wachovia and Wells Fargo. The bank did open a branch in the building now known as 400 South Tryon Street in 2008.

Construction already underway

The new building is the latest bank-driven office tower uptown, taking its place in a skyline that’s long been dominated by financial institutions.

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Lincoln Harris and Goldman Sachs bought the 10 acres that were home to the Observer and Reeves Sheet Metal for about $37.5 million last year. Since the purchases closed, they’ve demolished the buildings next to Bank of America Stadium, and workers have been clearing and grading the land. The full site covers all the land bounded by Stonewall, Tryon, Mint and Hill streets.

Progress is already well underway on the foundations of the new building, with workers excavating and sinking pilings into the ground. A new tower crane, the latest to pop up on Charlotte’s skyline, was erected on the site last month.

“We’ve had a longstanding relationship with Bank of America,” said Johno Harris, president of Lincoln Harris. “To have a chance and opportunity to build a premier office building for them is fantastic.”

The move is just the first phase of the new development, which calls for a major mixed-use project with uses such as shops, restaurants, residences, a hotel and more office space. Harris said more details on the rest of the plans will be coming soon.

The office tower will total about 845,000 square feet of leaseable office space. Harris said marketing for the unleased space is off to a good start.

“We’ve already seen a significant amount of interest for the spec space,” said Harris.

A joint venture of Gilbane and Shelco is acting as the general contractor on the new project, while LS3P and HKS are the architects.

The building is the biggest new chunk of office space constructed since the 48-story Duke Energy Center, which totals about 1.5 million square feet and opened in 2010. That tower was meant to be Wachovia’s new headquarters before the bank was sold to Wells Fargo.

Lincoln Harris’ new building is larger than both the new 300 South Tryon building (630,000 square feet) and the 615 South College office tower (370,000 square feet).

It’s the first new office building for Bank of America since it opened the 32-story tower adjacent to its 60-story headquarters, the city’s tallest building. Called 1 Bank of America, the green, glass-sheathed building totals 750,000 square feet, almost all occupied by Bank of America. It’s adjacent to the Ritz-Carlton, which opened in 2009 as part of the same project.

Bank of America is the latest bank to take space in a new Charlotte building.

Regions Bank leased almost 64,000 square feet of space in 615 South College, next to the Westin hotel, in September. In October, Wells Fargo leased the entire new Brigham building in Ballantyne Corporate Park, taking 287,500 square feet. And Barings is the anchor tenant at 300 South Tryon, an office tower opening later this year.

Crafting Banktown’s skyline

Over the decades, Bank of America has played an outsized role in crafting Charlotte’s skyline as it expanded into a nationwide bank through a series of mega-mergers. It has erected its own buildings to house employees and leased space in other properties.

Under Moynihan in recent years, the bank has actually been working to reduce its real estate holdings as it looks to trim costs. In last year’s annual letter to shareholders, the CEO said Bank of America had reduced its real estate footprint over time by 34 percent, or 44 million square feet. “To put that in context, the Empire State Building is roughly 3 million square feet, “ Moynihan wrote.

As of December 31, the bank owned or leased about 81.7 million square feet in more than 21,000 locations worldwide, including about 76 million square feet in the U.S., according to its latest annual report.

In an example of how it shuffles the space it uses for employees, the Observer reported last year that Bank of America had been asking tenants in its headquarters building and 1 Bank of America Center if they would be willing to leave before their leases were up because the company was looking to use the space itself.

The new building is the latest teaming of Bank of America and Lincoln Harris. Dallas-based Lincoln Property was a partner in building the bank’s headquarters tower, which opened in 1992, before the company formed Lincoln Harris as a joint venture with Charlotte-based Harris Group. Lincoln Harris also long served as a property manager for Bank of America until it dropped the firm in 2015 as it shrunk the number of real estate firms with which it worked.

Ely Portillo: 704-358-5041, @ESPortillo