The Raleigh/Durham retail market consists of approximately 41 million square feet and serves a population of about 1.75 million people. Raleigh, Durham and Chapel Hill comprise the “Research Triangle” metropolitan region, which is continuously ranked among the best areas in the nation to live and work. The retail market has an overall low vacancy rate and remains relatively healthy despite the lingering recession. A period of remarkable growth has slowed and only a handful of new developments opened in 2011. These include Park West Village, a 373,748 square feet power center located in Morrisville at Highway 54 and Cary Parkway, and the 57,511-square-foot Market at Colonnade, a shopping center anchored by Whole Foods and located on Six Forks Road in north Raleigh. Another notable project is the renovation of the 200,000-square-foot Waverly Place in Cary. Few new development opportunities are expected in the near future and positive absorption of vacancy for anchor and shop space has been encouraging, as centers have continued to strengthen albeit at lower rental rates. Job growth drivers are simply not there to support the rapid retail growth the area experienced prior to the recession. Trends in the marketplace include expansion of discount chains such as …
North Carolina
The retail market in the Raleigh-Durham-Chapel Hill MSA (“The Triangle”) is steadily improving. Retail vacancy dropped to 8.39 percent within the Triangle as of the third quarter — the result approximately 525,000 square feet in absorption over the past 12 months. Investors and retailers alike continue to be attracted to the region because of its sustainable economy fueled by the state government, Research Triangle Park and the University system. Several new anchor retailers entered the Triangle market during 2010, absorbing the majority of available boxes abandoned by Circuit City and Linens ‘N Things. Nordstrom Rack filled the former Linens ‘N Things space at CBL’s Renaissance Center at Southpoint in Durham; Ollie’s Bargain Outlet opened at York Properties’ Cary Village Square in Cary; The Container Storemade its Triangle debut in the former Circuit City location on Glenwood Avenue across from Crabtree Valley Mall in Raleigh; and buybuy BABY opened its first Triangle location at Kimco’s New Hope Commons in Durham. Only a small amount of new retail development was completed in 2010. Kane Realty delivered the only anchored retail project at North Hills East, which is situated at Six Forks Road and Interstate 440 — Raleigh’s “Beltline”. Anchored by Harris Teeter …
In the stifling heat of August, the Charlotte office market seemed stagnant and weak. According to Jones Lang LaSalle, Charlotte lost nearly 13,000 jobs in the first two quarters of this year, pushing the unemployment rate to 12 percent. Year-over-year, second quarter office leasing activity fell 32 percent. To further paint a grim picture, Jones Lang LaSalle predicts that downtown Charlotte is in for a double-digit vacancy rate, due to the 2.5 million square feet of office space that will see completion in the next 18 to 24 months. In reality, the future of the Charlotte office market is much brighter than it looks on paper. “At the street level, a lot of brokers remain pretty busy. There are still deals being done; they’re just taking longer,” says Tim Bahr of Charlotte-based NAI Southern Real Estate. It also happens to be the tail end of vacation season, and everything, commercial real estate included, is a bit more sluggish during the twilight of summer than during the rest of the year. “This time of year is typically slow. With the economy, it just seems like that’s amplified things a bit,” he says. The office spaces that are frequently being occupied in …
In the stifling heat of August, the Charlotte office market seemed stagnant and weak. According to Jones Lang LaSalle, Charlotte lost nearly 13,000 jobs in the first two quarters of this year, pushing the unemployment rate to 12 percent. Year-over-year, second quarter office leasing activity fell 32 percent. To further paint a grim picture, Jones Lang LaSalle predicts that downtown Charlotte is in for a double-digit vacancy rate, due to the 2.5 million square feet of office space that will see completion in the next 18 to 24 months. In reality, the future of the Charlotte office market is much brighter than it looks on paper. “At the street level, a lot of brokers remain pretty busy. There are still deals being done; they’re just taking longer,” says Tim Bahr of Charlotte-based NAI Southern Real Estate. It’s also happens to be the tail end of vacation season, and everything, commercial real estate included, is a bit more sluggish during the twilight of summer than during the rest of the year. “This time of year is typically slow, and with the economy, it just seems like that’s amplified things a bit,” he says. The office spaces that are frequently being occupied …
Howard Bissell of The Bissell Cos. sums his take on the Charlotte office market by echoing a concern voiced by developers all across the country. In nearly every major market and in a vast array of property types, developers are hurting because of rampant economic uncertainty. Tenants and investors simply don’t know what’s next, so they aren’t making any moves. “There’s a lot of concern over the unknown,” Bissell says. “Depending on where you are in the Charlotte market, you can point to slow downs in the velocity of leasing. What we started seeing last year has just accelerated into 2009.” For developers like Bissell, the main concern in Charlotte isn’t that the office market has slowed, but that it’s taken a rapid course downward, a quick pace that nobody quite anticipated. Tenants are on the sidelines looking in. Bissell has had to put two of his developments on hold due to the recession. “We’re out there trying to capture every deal that we can, so long as it makes sense,” he says, noting that he foresees pursuing deals more aggressively in the next year. At the Charlotte Chamber of Commerce, Jeff Edge takes a brighter point of view toward …
The Charlotte industrial market has continued to weather the global economic storm with relative stability. Experts in the market believe this is by design and is not just good fortune. A disciplined development community that did not over-build the city is the foundation for the stability. The market size for institutional grade industrial product in Charlotte is approximately 30 million square feet. The entire market is well more than 100 million square feet, which comprises user-occupied and manufacturing product that institutional investors are not trading day-to-day. With 3.3 million square feet available, the institutional market stands at 11 percent vacant. Given the gloomy economic news that we have all grown accustomed to hearing, an 11 percent vacancy rate is not particularly unhealthy. The key statistic is this: in a 30 million-square-foot market, only 250,000 square feet is being constructed, representing less than 1 percent of the market. In addition, only 1.7 million square feet of product is in the planning stages, with no assurances that it will go vertical in the near future. If all 1.7 million square feet of product were to be built — which won’t happen — it would represent a 5.7 percent increase in inventory. There …
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