Northeast Raleigh Apartment Submarket Summary • 11,655 market rate units in 54 buildings and is 8.2% of the Raleigh-Durham metro market. • 3,095 units added since Q3 2010, an annualized rate of 3.1%, while the metro was 3.2% • Rent: $1,129.19 asking, $1,070.39 effective, 11.5% change, 0.63 months free rent, expenses at 39.5%; the Metro average is $1,177, concessions fell 0.3% in August (a five-month decline)
Office Market Overview REIS/Moody’s Analytics report real estate market data for thousands of metropolitan submarkets through the U.S. in several different market segments. REIS/Moody’s reports on twelve different office submarkets within the Raleigh-Durham area. The Northeast study area is centrally located within the US Route 1/Capitol Boulevard Corridor submarket. This submarket, which includes Downtown Wake Forest, contains approximately 4.3% of the metro area’s total office inventory. Inventory The US Route 1/Capitol Boulevard Corridor office submarket contained approximately 1.9 million SF of office space in Q3 2020 which was spread out across 35 buildings. There have been no additions since Q3 2010. There are no new construction projects that are expected through the end of 2022.
Market Conclusions
Vacancy Rate
REIS is tracking apartment construction activity that will deliver 378 units to the submarket by the end of the year, and net total absorption will be negative 304 units. Consequently, the vacancy rate will continue to drift upward to finish the year at 10.9%. During 2021 and 2022, developers are expected to deliver a total of 900 units of market rate rental apartments to the submarket amounting to 18.4% of the new construction introduced to the Raleigh-Durham region. Net new household formations at the Metro level during 2021 and 2022 are expected to average 1.6% annually, enough to facilitate an absorption rate averaging 2,673 units per year. The Northeast Raleigh submarket will benefit disproportionately from this growth rate, posting absorption averaging 450 units per year, 16.8% of the projected metro total. The submarket vacancy rate will finish 2021 at 11.5% and will decline 1.4 percentage points to 10.1% by year end 2022. Between now and year-end 2020 asking rents are expected to fall -4.1% to a level of $1,083, while effective rents will decline by -5.6% to $1,010.” The REIS data confirms the socioeconomic findings that the Wake Forest area is a destination.
The 17.6% vacancy rate is 2.7% higher than the Raleigh-Durham metro average. With 56,000 SF of negative absorption projected by the end of 2020, the vacancy rate is expected to increase 3.0% up to 20.6%. The US Route 1/Capitol Boulevard Corridor is projected to capture 75% of the metro’s 3.2% office employment rate growth for the years of 2021 and 2022. Nevertheless, the vacancy rate is expected to be 22.0% at the end of 2021 and 23.8% at the end of 2022.
Annual Absorption
• Vacancy: 5.4%, 70 basis points
The market has absorbed only 2000 square feet (SF) of space over the last 12 months and 8,400 SF since Q3 2010. In contrast, the metro region has averaged 606,800 SF of absorption since Q3 2010.
• Absorption: the Metro has had an annual absorption of 3,763 units since Q3 2010, the submarket was 378, or 10.9% greater than the average annual of 341 units.
FIGURE: 4.B.5
4
4
Study Area
US Route 1/Capitol Boulevard Corridor Office Submarket Credit: REIS/Moody’s Analytics and RKG Associates, Inc. 2020
Chapter 4: Appendix
Northeast Community Plan
110
111
Made with FlippingBook - professional solution for displaying marketing and sales documents online