Triangle Economic News

[KJHburg]

Raleigh Durham office market is holding up much better than its peer cities and this is with lots of contractions of space around the Triangle. 

This is the good the bad the ugly from the office market here in Charlotte and compared to our peers.  From JLL 1Q 2023 report:

     YTD to absorption sq ft.        % of office space absorbed    Total vacancy rate including subleases    Under construction space sq ft

Charlotte   -831,xxx sq ft                   -1.3%                                                                20.6%                                                            2.6 M sq ft

Atlanta    -462,xxx sq ft                           -.3%                                                                21.6%                                                              3.1 M sq ft

Nashville     -269,xxx sq ft                     -.6%                                                                  18.9%                                                                  2.96 M sq ft

RaleighDurham  -520,xxx sq ft           -.9%                                                                   15.2%                                                             1.8 M sq ft

Austin                    -562,xxx sq ft                -.8%                                                               18.9%                                                                 6.7 M sq ft

other notable vacancies rates which are way up in key markets

San Francisco   26.4% now higher than perennial leader in this Houston 25.6%      Dallas 25%    NYC has more vacancy than than the entire Charlotte market but vacancy rate is 16.1%

National averages 

-.4% absorption percentage given the market size 

20.2% national vacancy rate

 

 

 

[rancenc]

Jobs announcement from 2 years ago seems to have reached a standstill!

[rancenc]

New industrial project breaks ground in Apex.

https://rebusinessonline.com/beacon-partners-breaks-ground-on-380-acre-apex-gateway-in-metro-raleigh/

[KJHburg]

with some layoffs at Epic Games in Cary and another small gaming company closing down, another is hiring for their small RTP office.

Triangle Inno - Hasbro-owned game developer grows in RTP (bizjournals.com)

[KJHburg]

This is information on the apartment market for Raleigh Cary metro compared to some peers.  Durham's information is in there I just did not want to add and average it all.

Charlotte as of right now is holding up better than its peer cities in vacancy and rental rates.  However we have proportional by a lot the most apartments under construction if you look at our market size.  Charlotte's rental rate will soften even more and vacancy will increase.   All markets are seeing asking rents decrease! 

I looked at Atlanta, Nashville and Raleigh Cary metro (only) and Charlotte.   This is all metro figures of course.  Notice NC markets have the lowest asking rents in this comparison.  Check out the report to sell the major metros.  

Absorption of New Apartments                                  

Q2 2023  Q3 2023                                                       

2295       2198     Charlotte

2413       2278   Nashville 

1374    1528   Raleigh

1811      2830  Atlanta 

Vacancy Rates   Q2 and Q3 2023

9.9       9.9       Charlotte

10,6    11.5   Nashville

9.6   10.4   Raleigh

9.9    11.0   Atlanta 

Asking Rents Q2 and Q3 2023  in $

1599   1566 Charlotte

1669  1639  Nashville

1583  1551  Raleigh

1653   1618  Atlanta 

Total inventory in units per market

203,593  Charlotte

151,815 Nashville

115,782  Raleigh

478,174  Atlanta 

Under construction units as of 3Q 2023

30,937   Charlotte

19,949  Nashville

14,900 Raleigh

32,569  Atlanta

U.S. Multifamily MarketBeat | United States | Cushman & Wakefield (cushmanwakefield.com)

  full report here 

conclusion  vacancies will continue to rise in all 4 cities and rents will fall in all above.   Construction will slow in all markets from the last few years.  

 

[rancenc]

Duke University's economic impact concerning startups

https://www.axios.com/local/raleigh/2023/10/18/duke-unc-nc-state-startup-money

[KJHburg]

Just saw this today Raleigh is one of the top 5 emerging markets for retiree relocations in USA.

The Top Five Emerging Metros for Retiree Relocation - Commercial Property Executive (commercialsearch.com)

[KJHburg]

New 200 job battery factory coming to Morrisville.  

""A planned “gigafactory” in Morrisville means more than 200 jobs and a $165 million investment.

Forge Battery, part of Colorado-based Forge Nano, will produce high-energy and high-power lithium-ion battery cells for defense, aerospace and specialty electric vehicle markets at the facility. If all goes as expected, production will begin in 2026.

On Tuesday, Forge was approved for a Job Development Investment Grant worth more than $1.5 million, provided it hits its milestones. Forge could also receive an additional $6.5 million from the state based on its current investment projections, which include sales tax exemptions on planned capital investments, according to the company.   Forge plans to pay minimum average wages of about $82,100 – though the deal only holds them to a minimum of about $74,000. A groundbreaking event is being planned for the first half of 2024.""

Battery maker Forge picks North Carolina for 200-job gigafactory - Triangle Business Journal (bizjournals.com)

[rancenc]

Swiss company setting up operations in the Triangle!!

https://www.axios.com/local/raleigh/2023/12/19/luxury-swiss-watchmaker-audemars-piguet-to-add-105-jobs-in-raleigh

[KJHburg]

7 hours ago, rancenc said:

Swiss company setting up operations in the Triangle!!

https://www.axios.com/local/raleigh/2023/12/19/luxury-swiss-watchmaker-audemars-piguet-to-add-105-jobs-in-raleigh

This is great news for amount of office space they taking which is basically 37% of the total office space in the first phase of Raleigh Iron Works.  Great win for Raleigh.  

from the Biz Journal article 

""In a statement, CEO Francois-Henry Bennahmias said that “quality of life, schools, health care, culture and safe communities were the major considerations for our teams" when choosing Raleigh.

According to the Raleigh Chamber of Commerce, it’s the largest new-to-market office lease of the year in the city.""

Audemars Piguet to open 100-job service center in Raleigh - Triangle Business Journal (bizjournals.com)

[KJHburg]

Raleigh Cary metro came in #2 in Milkens best performing large cities bested only by Austin and doing better than Charlotte which came in at #10.

Large Cities | Best-Performing Cities (milkeninstitute.org)

Edited February 6 by KJHburg

[KJHburg]

Siemens Energy announced a major expansion in NC yesterday with all the manufacturing jobs going to its Charlotte plant but the highest paying engineering jobs coming to Raleigh.

Siemens Energy to add more than 550 jobs, invest $150 million in NC (wral.com)

from the Triangle Biz Journal today

""Matt Neal, who runs Siemens Energy’s grid solutions business in Raleigh, said that while the manufacturing investment (and most of the jobs) will go to Charlotte, the stakes for the Triangle are high too. That’s because nearly 84 jobs coming to Raleigh as part of the deal are primarily in engineering, which often come with higher paychecks.

All of the jobs are high-paying, with minimum wages of more than $87,000, according to what the company told the state about its plans for both Mecklenburg and Wake counties. When asked if the Raleigh jobs might pay more than what’s being promised to Charlotte, Neal said the local positions “are more white collar jobs than manufacturing positions.”  For Siemens Energy in Raleigh, that means both jobs and real estate, as the company is in the final stages of negotiating a move that will double its space here. The plan is to double its real estate footprint by moving from the current location on Capital Boulevard near Interstate 540 to a new, yet-to-be-finalized spot closer to I-440.""

Inside Siemens Energy's plans to bring 84 jobs to Raleigh - Triangle Business Journal (bizjournals.com)

[Rufus]

1 hour ago, KJHburg said:

The plan is to double its real estate footprint by moving from the current location on Capital Boulevard near Interstate 540 to a new, yet-to-be-finalized spot closer to I-440.""

This all but screams North Hills. Either the office development on the old JCP lot or in the new innovation district down the street. Or maybe Midtown Exchange. But anything other than those three sites would be a surprise. My money is on the innovation district bc Siemens is a name brand that can be a catalyst for other tech/energy/engineering firms. 

[KJHburg]

2 hours ago, Rufus said:

This all but screams North Hills. Either the office development on the old JCP lot or in the new innovation district down the street. Or maybe Midtown Exchange. But anything other than those three sites would be a surprise. My money is on the innovation district bc Siemens is a name brand that can be a catalyst for other tech/energy/engineering firms. 

Yes first thing I thought too and I am sure Kane is on it and they will want amenitized office space to attract these new engineers.  

[RALNATIVE]

7 hours ago, KJHburg said:

Yes first thing I thought too and I am sure Kane is on it and they will want amenitized office space to attract these new engineers.  

I would love to drive down 440 and see the Siemens logo on a building in the NHID. Talk about raising Midtown's profile. We need more large international conglomerates in this area and Siemens is perfect.

[rancenc]

Positive economic news for the state and the metro area!

https://www.wral.com/story/nearly-75-000-potential-new-jobs-in-the-pipeline-nc-s-top-economic-developer-says/21291576/

[carolina1792]

UNC Health looking to build the state's first self-standing children's hospital at the cost of over $3 billion dollars. 

 

https://www.bizjournals.com/triangle/news/2024/02/20/unc-health-childrens-hospital-fundraising-land.html

[KJHburg]

39 minutes ago, carolina1792 said:

UNC Health looking to build the state's first self-standing children's hospital at the cost of over $3 billion dollars. 

 

https://www.bizjournals.com/triangle/news/2024/02/20/unc-health-childrens-hospital-fundraising-land.html

I just read this myself and this is a big plum probably end up in Durham or Wake counties as Orange County is so limited in sites.  Maybe this could be near or a part of RTP in terms of some large landowner selling some of their land there.  another idea is that the state should gift some of the state owned land in west Raleigh off Edwards Mill Rd area.  

Here are some details:

""UNC Health is in the early stages of planning to build a state-of-the-art, multibillion-dollar children's hospital in the Triangle region. It's a years-long project that would require hundreds of acres and that could become one of the largest economic development projects in the area's history.

North Carolina is one of the largest state's in the U.S. without a freestanding children's hospital, putting limitations on the availability of care and pushing families to seek care outside of the state. UNC Health is aiming to change that with a $2 billion to $3 billion investment in a new facility that could serve the entire Southeast.

The health system recently formed a new leadership team solely dedicated to advancing what UNC officials say will be an eight- to 10-year project.  

UNC Health envisions a facility with between 500 to 600 beds, with 100 of those dedicated solely to behavioral health patients, Willis said. The hospital would serve as the focal point of a children's health care campus, that could also include medical office buildings, outpatient facilities and capacity for research activities.

This will require a lot of land and capital. UNC health is searching for between 200 to 300 acres of land to build out the campus. The health system expects the project to cost at least $2 billion, which includes an initial $320 million investment that UNC Health received last year from lawmakers in the state budget""

[carolina1792]

40 minutes ago, KJHburg said:

I just read this myself and this is a big plum probably end up in Durham or Wake counties as Orange County is so limited in sites.  Maybe this could be near or a part of RTP in terms of some large landowner selling some of their land there.  another idea is that the state should gift some of the state owned land in west Raleigh off Edwards Mill Rd area.  

Here are some details:

""UNC Health is in the early stages of planning to build a state-of-the-art, multibillion-dollar children's hospital in the Triangle region. It's a years-long project that would require hundreds of acres and that could become one of the largest economic development projects in the area's history.

North Carolina is one of the largest state's in the U.S. without a freestanding children's hospital, putting limitations on the availability of care and pushing families to seek care outside of the state. UNC Health is aiming to change that with a $2 billion to $3 billion investment in a new facility that could serve the entire Southeast.

The health system recently formed a new leadership team solely dedicated to advancing what UNC officials say will be an eight- to 10-year project.  

UNC Health envisions a facility with between 500 to 600 beds, with 100 of those dedicated solely to behavioral health patients, Willis said. The hospital would serve as the focal point of a children's health care campus, that could also include medical office buildings, outpatient facilities and capacity for research activities.

This will require a lot of land and capital. UNC health is searching for between 200 to 300 acres of land to build out the campus. The health system expects the project to cost at least $2 billion, which includes an initial $320 million investment that UNC Health received last year from lawmakers in the state budget""

UNC System is no longer headquartered in Chapel Hills and Orange County hasn't kept up with growth like the rest of the counties in the Triangle. Given that the lead for this project lives in Cary I would say RTP, Cary, or West Raleigh. 

[Rufus]

I always thought Levine, Brenner, and other Children's hospitals were separate, but I guess the nuance is that they are attached to the main hospital. 

[KJHburg]

the Boston area feels REALLY THREATENED by the growth of the biotech and biopharma industry in the Raleigh Durham area.  Watch the video too and see one of the reporters who obviously not been to NC maybe ever fake  a southern accent.  Almost like he thinks people in the area should be just picking cotton.  Very haughty and plain stupid attitude displayed.

Anyway I got news for the Boston area it is not just the manufacturing aspect moving here but also quite a bit of research and development here as well.

In growing biomanufacturing industry, it's Raleigh-Durham vs. Boston (bostonglobe.com)

I am sure many in the Triangle want to pay more than double for their housing, endure cold snowy winters and overall higher taxes to live there.  

 

 

[KJHburg]

Here is a software company adding 100 people this year to its Durham office and taking More office space.  Avalara and they are located in downtown Durham near the Bulls ballpark. 

Triangle Inno - Tech firm expands Durham offices ahead of hiring spree (bizjournals.com)

[Richhamleigh, DC]

On 2/20/2024 at 12:41 PM, rancenc said:

Positive economic news for the state and the metro area!

https://www.wral.com/story/nearly-75-000-potential-new-jobs-in-the-pipeline-nc-s-top-economic-developer-says/21291576/

Meanwhile, other states like Connecticut, are gearing uo to pounce on NC if Robinson is elected.  

[KJHburg]

Raleigh has been named one of the top 15 cities in the WORLD for innovation and talent that drive commercial real estate.  

Raleigh came in at number 15 but the list includes San Francisco, Beijing, Boston, Tokyo and London as the top 5.  Raleigh making this list as the only city in the southeast is quite impressive.  

Where Innovation Drives CRE Demand - Commercial Property Executive (commercialsearch.com)

from JLL itself

Innovation Geographies 2024 (jll.com)

Edited March 27 by KJHburg

[KJHburg]

story about why and how Raleigh and Durham became two different MSAs.  I believe they are one metro that is larger than Nashville.   Where is this open land where one city fades out before the other one starts?  Drive US 70 from I-440 in Raleigh to I-85 in Durham or the bumper-to-bumper traffic in both directions from Wake County to Durham County and vice versa.  I do believe it matters as it makes the area look much smaller than it is.  Is Fort Worth and Dallas 2 metros?  Or St Paul and Minneapolis? 

Open Source: The NC Triangle isn’t counted as a single metro. Some say that’s an issue. (msn.com)