Editor’s Note: Each Friday, WRAL TechWire takes a deep dive into the Triangle’s real estate markets.  That includes stories on what’s happening in the Triangle’s residential market, and, like today, the commercial real estate market. 

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RALEIGH – Commercial real estate in the Triangle remains in demand, but the industrial sector is more in demand than other areas of the market, including the office space subsector, according to reports released earlier this year from CBRE|Raleigh.

While the office market experienced a negative net absorption in the fourth quarter of 2022, with a rise in vacancy rate to 13.3%, the industrial and flex segment of the market saw the opposite trend, according to two reports from the real estate brokerage.

Among the office sector, there were some significant changes in the fourth quarter, including the vacating of 116,000 square feet of space in Morrisville by ChannelAdvisor following the sale of the company to Commerce Hub in September 2022.

But some signs exist that office space will again be used by office workers, including the recent news that Meta, the parent company of Facebook, has secured space at the American Tobacco Campus in Durham (Editor’s Note: The American Tobacco Campus is owned and operated by Capitol Broadcasting Company, the parent company of WRAL TechWire).

Further, a recent report from LinkedIn noted that remote job postings declined to 14% of all paid listings, down from a peak of 20% earlier in 2022, according to CBRE.

And some companies, most notably Amazon, have mandated a return to office policy.

“Companies are realizing that innovation, ideation, collaboration, mentorship, and engagement suffer when people are not working together in person,” said L. Heath Chapman, executive vice president at CBRE|Raleigh, in an interview with WRAL TechWire.  “While the five-day office week may never return to the way it was pre-pandemic, forward thinking companies will continue to invest in their office to create spaces where people want to be rather than a place they must be.

Triangle economy will be one of best metro areas in US for growth, study says

Economic expansion in the Triangle, despite macroeconomic uncertainty

Plus, the Triangle continues to see a bevy of economic investment through multiple economic development announcements that occurred in the fourth quarter of 2022 and through the first half of the first quarter of 2023.

In 2022, companies expanding or relocating to the Triangle announced the creation of 12,780 jobs with $11.3 billion in investment planned.  And office-using employment grew by 20,900 jobs, or 7.8% of all workers in the region, between November 2021 and November 2022, according to CBRE.

“We are no longer a secret,” said Chapman.  “Big tech is here, and the talent is here to fill their needs.”

And one thing that is changing within the Triangle and its 15 submarkets tracked by CBRE|Raleigh is that companies are seeking higher-quality office spaces, if they’re looking to employ workers from an in-person location.

“Well located, high amenity office buildings are performing well,” said Chapman.  “We’ve seen a significant shift from businesses relocating from lower quality office buildings to those that that offer a unique, differentiating experience.”

And that’s likely to continue, even if the macroeconomic climate continues to worsen, or the economy slips toward recession, Chapman noted.

“We will only see this trend continue as companies reevaluate their existing leases and determine if their current location is truly a place where they can recruit and retain the best talent,” said Chapman.

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WRAL TechWire reporter Jason Parker, who is also a licensed North Carolina real estate agent, works with journalists from WRAL.com to track and present market data and report on how people are experiencing the region’s changing real estate markets.  These special reports will use the category tag “Triangle Real Estate” or “Triangle Real Estate Market.