With a waning pandemic in sight, the Triangle office market saw signs of increased activity during the fourth quarter of 2020 according to the CBRE/Raleigh Office MarketView report.
With the rollout of the vaccine, tenants and landlords began re-engaging in conversations of re-occupancy and long-term lease decisions. Despite a slight increase in vacancy rates from the third quarter, overall vacancy remained at a healthy 11.3 percent which is significantly lower than the five-year average of 13.1 percent.
Class A office vacancy ended the quarter even lower at 9.9 percent. This marks the seventh consecutive year Class A vacancy remained below 10 percent.
Amidst the pandemic, the market maintained healthy fundamentals with net absorption at 170,534 square feet. Class A average rental rates increased, ending the quarter at a full-service rate of $29.73 per square foot, compared to $29.59 at the end of the third quarter.
“Office product has effectively been on ‘pause’ throughout the pandemic,” said Executive Vice President Brad Corsmeier in a statement.
“Although our market experienced a slowdown over the last 12 months, we believe the Triangle is well-positioned in the long run for future growth. We continue to outperform other major markets and national averages in office-using employment growth, unemployment rate, vacancy rates and absorption rates.”
He added, “Glimmers of activity presented itself in the fourth quarter and we are seeing that movement continue in the beginning of 2021.”
The CBRE|Raleigh Office MarketView highlights vacancy rates, lease rates and net absorption for the overall Triangle office market, as well as each submarket throughout the Triangle.
The report provides information on net absorption compared to vacancy, average Class A office asking rates, employment statistics, top transactions and more. CBRE|Raleigh releases the Office MarketView at the completion of each quarter throughout the year.
