Avison Young in Chapel Hill
Avison Young is one of the area’s leading providers of integrated commercial real estate services. With offices in Chapel Hill and Raleigh, we offer full market coverage in and around the greater Raleigh-Durham-Chapel Hill area. Our organization, among the largest in the region, includes senior professionals with substantial bench strength in brokerage, property management, accounting, research and marketing, offering a level of service unparalleled in central North Carolina. When it comes to office, industrial, retail, mixed-use and multi-family properties, we bring our global team of professionals to every transaction. In addition, we have one of the top research departments in the area, offering quarterly insights into local and regional commercial real estate activities. The depth of our market research assures that we capitalize on the trends impacting our clients and their real estate needs.
The Raleigh-Durham-Chapel Hill region, more commonly referred to as The Triangle, spans an area of approximately 3,480 miles and consists of seven counties. Population growth has been explosive in recent years, consistently placing the Triangle among the fastest-growing metropolitan areas in the nation. The region is anchored by Raleigh, Durham and Chapel Hill. Centrally located among the three cities is the world-renowned, 7,000-acre Research Triangle Park (RTP), a well-established and globally prominent technology research and development center that serves as an economic driver for the area. The Triangle area is characterized by a highly-educated and diverse workforce, due in large part to the location of three of the nation’s top research universities – Duke University, the University of North Carolina at Chapel Hill and North Carolina State University. The State of North Carolina is the Triangle’s largest employer, providing the region with a significant level of stability in its employment base. The region also is home to a large number of high-tech, healthcare, pharmaceutical, biotech, financial and service industries. Comprising one of the most dynamic regional economies in the U.S., the Triangle is among the best positioned metros in the U.S. for long-term economic expansion and population growth.
The Triangle office market totals approximately 43 million square feet. Over the last 15 years, the Central Business Districts in Raleigh and Durham have experienced a renaissance with office developments reshaping the skylines and an influx of workers driving demand for new retail, dining and residential options. The region’s suburban markets are also thriving, and overall office vacancy ended 2016 at its lowest level since 2000. With 2.4 million square feet of construction underway, development activity has increased in response to tightening market conditions but remains below historical levels, positioning the market for healthy growth that is in line with demand in 2017.
The Triangle’s retail market consists of approximately 45 million square feet, just 6.4% of which was vacant at year-end 2016. As in most markets across the U.S., e-commerce continues to escalate market disruption through shifting consumer habits, and the addition of several anchor spaces to the market in recent months has slowed the decline in vacancy. Nonetheless, overall tenant demand remains strong as robust economic and population growth are fueling an influx of new-to-market retailers, particularly grocers and fast-casual restaurants. Additional big-box closures are likely in 2017 as traditional anchor stores face intense pressure from e-commerce. Nonetheless, strong demographics and construction activity that is modest by historical standards are helping the region to thrive despite the rapidly shifting tides in today’s retail environment.
With more than 72 million square feet, the Triangle's industrial market continues to experience strong overall tenant demand, driving asking rental rates to new highs in 2016. Warehouse vacancy hovers near a 16-year low despite a significant increase in speculative construction in 2016. While additional construction deliveries may drive vacancy slightly higher in 2017, the Triangle industrial market should continue to favor landlords. Demand remains strong among a wide range of tenants, and the region, like others in the southeastern U.S., is witnessing increased activity related to the rise in e-commerce.
The Triangle closed out another year of healthy demand from commercial real estate investors in 2016, with dollar volume totaling $3.9 billion. With leasing fundamentals strong across all property types and yields still incredibly attractive when compared to larger Tier 1 markets, the Triangle region should continue to attract robust investment activity in 2017. Overall pricing is expected to remain strong but is likely to moderate as investors exercise more discretion. Multi-family properties, which have dominated sales activity in recent years, will remain in strong demand, but this segment has likely peaked in terms of both volume and pricing.