Last week, the Future of Work series took an in-depth look at the demand for land, which has increased in the Triangle and can now be described as “insatiable,” while developers look to shore up their land positions. That’s especially the case in the industrial sector, the topic of this week’s special report.
RALEIGH – The Triangle is well-positioned to capitalize on its strengths when it comes to the expansion of the commercial real estate market, particularly in the industrial sector.
That’s according to two experts in the industrial sector, who spoke with WRAL TechWire reporter Jason Parker in a LinkedIn Live broadcast held earlier today.
“We’re already well-positioned,” said Mehtab Randhawa, senior director, industrial research at JLL. “We’re not a coastal market, we’re not land constrained, we’ve got land to grow on all four sides.”
Fact is, said Randhawa, many people and many companies have elected to move to the Triangle from high-cost markets, including those in the northeast, but also ones in California and other southeastern markets.
“Labor is top of mind for a lot of different companies right now as they’re making site selection decisions, and cost of labor and availability of land are two driving factors for tenant demand,” said Randhawa.
The Triangle attracts a diverse industrial user pool, said Al Williams, senior vice president, industrial at JLL, during the panel discussion on WRAL TechWire’s LinkedIn Live broadcast.
“Raleigh-Durham is unique with the life science component also absorbing our big box developments,” said Williams. (Editor’s Note: WRAL TechWire’s “Future of Work” series next turns to the life science sector, including next week’s LinkedIn Live event, for which readers can register online.)
And the biggest change during the prior two years, following the onset of the global COVID-19 pandemic, said Williams, is the amount of speculative development, or spec.
“We’ve historically been about a one and a half million spec annually, and I think in 2022 we’re going to be closer to 3.8, 3.9 million,” said Williams. “Even with that pretty significant jump in the timeline, we’re already seeing above 50%, 60% of that space spoken for, and we’re not even halfway through the year.”
“Demand has certainly outpaced supply throughout the pandemic and coming out of it and we see that trend continuing with an even more robust pipeline coming in 2023 and an even greater geographical radius than we’re historically used to seeing,” explained Williams.
The Triangle could be moving toward a “hub-and-spoke” model of growth, said Williams. That’s because, he said, given the market conditions and pressures, “developers are going outward, out toward Sanford, or east through Knightdale to Wendell, or along the 85 corridor west toward Greensboro.”
“We’re going to see a lot of development in these tertiary areas,” said Williams. “Seeing it in every direction.”
This editorial package was produced with funding support from JLL and other partners. WRAL TechWire retains full editorial control of all content.