RALEIGH – There are signs that commercial real estate continues to be in high demand in the Triangle despite the ongoing COVID challenge, according to the latest industrial market report from CBRE that analyzes data from the second quarter of the year.
“The industrial market in Raleigh-Durham continues to be highlighted by low vacancy,” reads the report, “while the influx of manufacturing companies and the steady growth of the life-sciences sector continues to create strong demand.”
The report found an increase in flex vacancy from 8.3% in the first quarter of the year to 9.2% in the second quarter of the year, but there was also increased demand for warehouse space. The vacancy rate fell to 4% in that portion of the market in the second quarter, compared to 4.7% in the first quarter.
And, rental rates have increased for both warehouse space and flex space, ending the quarter at $6.09 per square foot NNN and $12.63 per square foot NNN respectively.
“Tightening vacancy has pushed companies to consider peripheral areas of the market, whereas Research Triangle Park has historically been a primary focus for many of these industrial users,” a press statement issued by CBRE reads, noting that the submarkets in eastern or southern Wake County are currently experiencing an increase in the level of demand and activity.
“Industrial inventory remains tight across the Triangle,” said Dodson Schenck, CBRE Director of Industrial & Logistics Services. “As companies continue to invest in our market, vacancy declines and the opportunity for developers continues to grow.”
Schenk said that there is an additional 1.5 million of square feet of space currently under construction in the Triangle, adding that this additional square footage of space “will contribute greatly to our industrial market’s future availability.”
Leasing activity remained strong in the second quarter, too, the report states. CBRE noted the leasing of 158,000 square feet of space by BlueSky Solutions, an electronics recycler, Park Communications leasing 168,800 square feet of new space while also renewing a lease for 111,000 square feet of space, and The Upper Deck Company’s leasing of 126,000 square feet of space as the first tenant of Alexander Commerce Park, to serve as an east coast headquarters location, according to reporting from REBusiness Online in July 2021.
An CBRE report analyzing the commercial office market in the Triangle issued earlier this month found that the vacancy rate for office space is 13.02%, a slight increase from the prior quarter. But the rental rates for Class A office space increased to nearly $30 per square foot, the data found.