How Retail and Office Work Together

Smaller office occupiers, of 15,000 square feet or less, including tech start-ups, are among those that are most focused on lively settings with ample retail, Showalter said. The trend helps explain why mixed-use districts like East Austin in Texas, Fulton Market in Chicago, West Midtown in Atlanta and South End in Charlotte, North Carolina, boast "significantly outsized demand" for office space, the executive noted. "The majority of the time, these tenants have made a strategic, thoughtful research decision to move to a true mixed-use environment, whether it's a West Midtown or a Fulton Market or a Wynwood/Design District in Miami," Showalter said. "They narrow their search based on that decision."

According to Cushman & Wakefield, office development in Charlotte's South End from 2019 through the second quarter of 2024 totaled more than 3 million square feet, a 132.8% increase in overall inventory. Notable new mixed-use and Design District projects in South End include 110 East, The Line, Vantage South End and Lowe's Design Center Tower. The average office rental rate for South End and Midtown hit a historical high in the second quarter at $46.81 per square foot, with the two areas' combined Class A rates reaching $47.72. Those South End/Midtown rates were the highest of any submarket in Charlotte or the Carolinas, the firm said.

Talent Magnets

Stream Realty relocated its Chicago office to the Fulton Market District in part, Showalter said, because the mixed-use setting would help the national real estate firm better attract and retain young talent. The district is known for its historic, red-brick buildings and lineup of restaurants, bars, retail shops and luxury hotels, along with both corporate headquarters and "trophy" offices. "Fulton Market is the most active food-and-beverage submarket in all of Chicago," Showalter said. "It has become a true live-work-play environment, which was conducive to the type of office location that we were looking for."