2017 ended with a boom for the Research Triangle. With a full year of a new federal administration, businesses took the first part of 2017 to reassess their future location and expansion projects. By year end projects were back online as employment numbers rose locally, tax rates dropped nationally and economic growth was felt across the world.
The hot topic of the year was Amazon's Second HQ location search across North America. A project worth billions of dollars that would bring millions of square feet of office space to the winner, Raleigh was shortlisted to the 2018 selection list!
2018 predictions are pointing to more record growth for the commercial real estate market domestically as the Triangle alone absorbed over 1.4 Million SF in 2017.
Raleigh business owners and tenants will find interesting:
Class A Space is still the star and most sought after in the Triangle, 1 Million SF of it was leased in 2017!
Triangle vacancies held steady at 8.3%, in line with end of year vacancies in 2016. This stand still is the result of 1.7 Million SF of new office developments finally coming onto market.
Downtown Durham continues to sit at only2% vacant space.
Triangle Market Office sales topped over $1 Billion in volume for 2017, with an average per SF price of $152.00/psf.
How does this apply to business owners and tenants?
For tenants, large construction projects would lead to competition in leasing, but the market is still heavily landlord centric. Class A rental rates increased over $2.00 per SF from 2016 and construction prices are continuing to rise, so don't expect much concession in rate numbers. Look for other carrots in abatement and improvement dollars to come from Landlord's pockets (sparingly).
For growth stage and startup companies, the time to raise capital is NOW. Fund raise and go pitch your seed rounds. The current economic boom and upswing can only last so long and every dollar raised helps in gaining more professional space for your growing (but pre-revenue) company.