Although the country’s economy as a whole is expected to slow over the next year, cities in secondary markets like North Carolina’s Raleigh and Charlotte are still on the rise. Investors are looking to these smaller cities for their strong economic gains and the potential for upside growth on a variety of commercial real estate investments. Office and multifamily assets are traditionally go-to property types for investors in these regions, but Raleigh in particular is continuing to expand its retail market.
Raleigh’s Meteoric Rise
By the end of 2019, Raleigh’s retail market reported increased rental prices of more than seven percent, making the city the highest rent growth area in the United States. The city’s retail market is driven by several factors, including its strong population growth, high wages, educated workforce and exceptional job market. The capital city boasts some of the highest median household incomes in the region, placing Raleigh just behind Austin, Texas as the second wealthiest city in the South.
Raleigh’s Retail Landscape
The suburban markets in Raleigh are experiencing just as much growth as the city’s downtown center as younger workers flock to areas on the outskirts of the urban core. Several large-scale multi-use developments will serve these areas and bring more than 470,000 feet of retail space to Raleigh in the coming years. One of the newest projects of this kind is an adaptive-reuse project that will transform old steel mills and warehouses into a collection of offices, shops and apartments.
Breaking Ground on Raleigh Iron Works
Situated northeast of downtown Raleigh near the Mordecai and Five Points neighborhoods lies the future site of Raleigh Iron Works. This multi-phase mixed-use project will preserve a portion of the city’s industrial past by repurposing former warehouses and steel mills from the ground up. Adaptive-reuse projects of this nature are gaining in popularity within the Raleigh market because they fit in well with the area’s thriving, innovative culture. The project’s $150 million first phase will contain 500,000 square feet of creative office space, 90,000 square feet of retail space and at least 220 residential units.
Interested in investing in North Carolina commercial real estate? Ground + Space is a leading commercial real estate brokerage firm based in North Carolina that specializes in single-tenant and retail NNN investments. Contact us today to find out more about our current listings or sign up for our mailing list to stay in-the-know on all that North Carolina has to offer.