2019-09-06_DTZ戴德梁行_Industrial_Q2_2019_Raleigh-Durham_4页_444kb

TRIANGLE INDUSTRIAL MARKET SUMMARY Q2 2019

Core Content Overview

The Raleigh-Durham (Triangle) industrial market, encompassing both flex and warehouse sectors, showed strong performance in Q2 2019. The market is characterized by solid demand, low vacancy rates, and moderate supply growth, leading to increased rental rates and positive net absorption. The overall market fundamentals are supported by a robust local economy and increasing corporate activity.

Key Market Indicators

Flex Market

Warehouse Market

Market Trends

Economy

• The Raleigh-Durham area has been one of the healthiest markets in the southeast due to its diverse economy, strong job growth, and low unemployment.
• Q2 2019 unemployment dropped to 3.4%, down 20 bps from the previous quarter.
• Corporate expansions such as Cree's $1.0 billion investment and Schunk's $60 million investment contributed to market strength.
• The U.S. economy continued to grow steadily, recording 2.1% GDP growth in Q2 2019, with consumer spending being a key driver.

Warehouse Market

• Strong absorption continued for the third consecutive quarter, with 378,988 sf absorbed in Q2.
• Vacancy rates declined to 5.8%, a new historical low.
• RTP/I-40 Corridor led the decline in vacancy, dropping to 3.5% from 5.9% in Q1.
• Rental rates increased 16.7% year-over-year, with South Durham showing the highest growth at 44.5%.
• Limited new supply and high demand have created upward pressure on rents and limited availability for tenants.
• Major developments like Regional Commerce and Greenfield Parkway are expected to increase supply in the second half of the year.

Flex Market

• Absorption totaled 147,009 sf in Q2, with vacancy declining to 6.2% for the sixth consecutive quarter.
• US 1/Capital Blvd and Southern Wake County were the top submarkets for leasing activity.
• Rental rates increased to $12.13 psf, reflecting 4.1% year-over-year growth.
• West Raleigh had the highest growth in rental rates at 9.7%, followed by Eastern Wake County at 6.3%.
• RTP/I-40 Corridor remains the most desirable and expensive submarket with an average asking rent of $14.37 psf.
• New developments are expected to increase due to steady demand and downward pressure on vacancy.

Investment Sales

• Investment activity nearly doubled in Q2 2019, with total sales volume reaching $96.0 million.
• Year-to-date sales totaled $151.3 million, indicating strong investor interest.
• Notable transactions:
  • 3100-3200 Spring Forest Rd sold for $22.3 million.
  • Eastgate 540 sold for $14.3 million.
  • 4018 Stirrup Creek Dr sold for $8.5 million.

Outlook

• High demand and limited supply are expected to continue, with tenants anticipating new developments.
• Construction activity is likely to increase in the second half of 2019 to address space shortages.
• Flex market is projected to maintain its positive absorption trend and low vacancy.
• Warehouse market is expected to benefit from new supply and increased demand, though rental rates may remain stable.

Submarket Performance

Warehouse Submarkets

Flex Submarkets

Key Lease Transactions Q2 2019

Key Sales Transactions Q2 2019

Industrial Market Totals

About Cushman & Wakefield

• Cushman & Wakefield is a leading global real estate services firm with 51,000 employees across 400 offices in 70 countries.
• In 2018, the firm reported $8.2 billion in revenue from core services like leasing, capital markets, and valuation.
• The report is provided by Josh Chiles, a Research Analyst at Cushman & Wakefield, based in Morrisville, NC.

Notes

• Market Indicators are not reflective of U.S. MarketBeat tables.
• Rental rates reflect net asking $psf/year.
• The report is not guaranteed for accuracy and is based on multiple sources.