RALEIGH – New data show that rents are rising and available office space is declining across the Triangle as corporate growth is absorbing available square feet as fast or faster than it is being built.
Corporate real estate firm Jones Lang LaSalle reported Thursday that for the first time the Triangle market is hitting $40 per square foot rents for the first time.
Meanwhile, the vacancy rate has declined to a four-year-low of just over 10 percent despite the fact 1.2 million square feet of new space has recently become available.
For top tier (“Class A”) space in downtown Durham and downtown Raleigh the vacancy rate is even lower: 4 percent in Durham and 6.7 percent in Raleigh.
A recent report from rival firm CBRE noted similar trends.
And these market trends are likely to continue.
“Thanks to its talent-rich labor pool and reputation as an innovation hub, the market is not expected to slow down,” JLL says.
“Demand for quality will draw tenants to new construction projects, keeping vacancy near cyclical lows.
“Asking rents are expected to rise, especially in amenitized areas.”
Striving to meet demand, developers have more than 2.6 million square feet of space planned and being built, JLL noted.
The changing skylines of Durham and Raleigh are proof of the building surge, but JLL stresses that downtowns are not the only areas booming.
“More changes are on the horizon thanks to the more than 6.0 million square feet of proposed development.,” J:: explains.
“These projects span the gamut, from the redevelopment of Cary Towne Center into a mixed-use center to Downtown South, a $1.9 billion proposed entertainment district.”
“Raleigh-Durham’s changing landscape is far from limited to the urban sectors.
“In the suburbs, a new type of creative asset has taken hold. Former malls and big box retail are being converted to creative office space, incorporating large floor plates, high ceilings, and abundant parking. ”
The report notes two particular projects:
- INQ 1101, a former Sam’s Club, in Morrisville
- Twenty Three 33, a Ford showroom, in Cary