The Raleigh-Durham industrial market is currently posting some of the nation’s strongest fundamentals. In fact, this research-focused part of the state is growing faster than some major U.S. cities. As of the third financial quarter of 2019, just 1.7 percent of the industrial space in Raleigh is empty—a far lower rate than the five percent national average.
The Urban Land Institute ranked the Triangle No. 2 on its list of U.S. markets to watch for overall real estate prospects in 2020, and it’s easy to see why: steadily increasing asset values are drawing strong investor interest to the Triangle market. In fact, during the third financial quarter of 2019, industrial sales in the Triangle soared to $578 million.
Approximately one million square feet of space was delivered within the past 12 months, nearly all of which has been spoken for. Overall vacancy rates fell to just over four percent, while warehouse and distribution space vacancy rates dropped to a record low of 3.2 percent. Increasing demand for space from tenants has led to several new speculative projects throughout the Triangle region.
Industrial Market Highlights
Eastgate 540: A Charlotte-based development and investment firm recently broke ground on what will eventually become a 280,000-square-foot industrial building located within Eastgate 540. This 30-acre industrial park in a suburb just west of Raleigh was sold for $14.3 million in May 2019. All in all, a total of one million square feet of industrial space is slated for development at Eastgate 540.
Greenfield North 1201: A national developer has begun construction on a 165,291-square-foot speculative industrial warehouse in Garner, a suburb of Raleigh. Dubbed Greenfield North 1201, the property will make for a welcome addition to Greenfield North Business Park (currently 100 percent leased). Construction is scheduled to finish in July 2020.
Garner Business Park 70: Construction has begun on Garner Business Park 70, a four-building 625,000-square-foot industrial park off U.S. 70. A Cincinnati-based real estate firm plans to open the first of four buildings on the 50-acre industrial park campus in mid-2020. The property’s access to a major thoroughfare and proximity to the state capitol make it a prime location for warehouses, distribution centers and other industrial uses.
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