4Q15 Triangle Market Report
Here’s your Capital Compass perspective:
The year closed out with aggressive market rents pushing rates to RECORD LEVELS in the Triangle and Raleigh office markets. Overall Class A rents averaged $24 a SF (highest market rents at $35 per SF), with record vacancy levels of 8% market wide.
*Triangle is at a record of over 10 Co-working Communities / Startup Hubs
Raleigh business owners and tenants will find interesting:
The Triangle economy remains strong with new jobs reaching 5,700 in 4Q15 and unemployment rates down to 4.7%.
Over 600,000 SF of office space was leased in the last quarter bringing vacancies to 6.7% in Downtown Raleigh and as low as 2.5% in Downtown Durham.
Office space under construction reached 700,000 SF, but over HALF is already pre-leased.
Midtown Raleigh/North Hills area Class A office rents are now pushing $34 per SF, the tops of the Raleigh market.
How does this apply to business owners and tenants?
The economy is still churning in the Triangle with year to date office construction deliveries totaling over 1.3 million SF. Investment sales pushed $322 Million for office sales, averaging $151 per SF at cap rates of 6.2%.
For tenants, the market still remains in a landlord's favor. Activity is so hot in the leasing sector that most new projects under construction are already 50% pre-leased. To get discounted rates the best time now is to be one of the first few to pre-lease a new development. Talk to me to find out what are some new office projects.
For startup clients, less space and lower vacancy numbers mean more emphasis on shared space for small companies. With the close of the year, two new coworking options called The Loading Dock and The Nest were launched with complimentary community sponsors and mentors to assist new companies. Give me a call to discuss best pricing options!
- Capital Compass