The office market finished a good 1st Qtr. and looks to be picking up speed. Critics aside, the economy is on a slight rebound, with unemployment rates in the Triangle at its lowest levels since before the 2008 recession.
Raleigh business owners and tenants will find interesting:
Vacancy levels continue to drop from 15% in 4Q14 to 14.1% in the 1Q14
Class A office rental rates stayed steady from the 4th Qtr. at $21.86 per square foot.
There is no speculative space being developed! Out of the current Triangle office projects (Charter Square, Diamond View in Durham, Perimeter Park off I40 etc) close to 80% of the “under construction” space is ALREADY PRE-LEASED.
What does this mean for business owners and tenants? If you are looking to move into substantially bigger space, good luck. The options for new Class A space are extremely limited and the few ones available are at an all-time high rent rate in Raleigh.
The best option now? Have your agent negotiate your lease for opt outs and subleasing rights. The space crunch can only last for so long. As speculative office development will start popping up in the next few years, you’ll want to be ready to move, so having your lease allowing a jump at no penalty is critical.