Tech-Based Economy Propels Raleigh-Durham's Office Market Forward in 2018
Please read my recent market recap for Raleigh and the Triangle in the Southeast Real Estate Journal!
Here’s a few excerpts for your Capital Compass perspective:
After a banner year in 2017, the metro Raleigh-Durham’s office sector is continuing its surge forward with little worry of global economic or foreign policy changes. No secret to many across the nation, Raleigh and the Research Triangle have continued to become synonymous with the “recession proof” tech,life science and biotech industries fueling the 21st century economy. As such, Raleigh and the Triangle as a whole have continued to receive top accolades for corporate expansions and tech growth, including Site Selections #1 Top State to do business.
Top National Spot to Live and Work
Raleigh and the Research Triangle are home to the 2nd most educated city in the country. The metro is ranked in Top 4 US Tech Hubs to Watch in 2018 and has the 4th highest percentage of STEM workforce in the country. Trailing only San Francisco, Seattle and Austin, Raleigh sits at No. 4 in country for highest concentration of tech job openings. Forbes even ranks Raleigh-Durham at #2 for tech job growth across the US.
Rankings aside, business activity is the real confirmation of Raleigh-Durham’s national acclaim. Locally, Raleigh added over 4,200 jobs in 2017 with the Triangle unemployment rating sitting below the national average at 4.0%. The market is also home to over 500 startup companies that have fueled over $9.2 Billion in M&A activity.
At the time of this writing, the famed “Amazon HQ2” requirement as well as Apple’s own future HQ campus have both shortlisted Raleigh and the Triangle for their expansions with more relocation announcements predicted.
The office leasing market confirms the bull economy in Raleigh. The rise in rental rates of up over $2.00 per SF from 2017 is a direct result of increased demand and construction costs. Average office rental rates for 1Q18 sit at $23.31 per SF, with Class A averages at $27.00 per SF.
Demand continues to be strong for office space with a flurry of activity pushing 2018 forward. From 2017 through the start of 2018, Raleigh-Durham has absorbed over 1.5 Million SF of office space, pressing vacancy rates even further down. Metro vacancy rates were as low as 7.8% for 1Q18, a drop from over 8% vacant space in 2017.
For more on the Raleigh market and Leasing Activity, please read our whole article here!
- Capital Compass