US-1/Capitol Boulevard Corridor Submarket Summary • 1.9M square feet in 35 buildings is 4.3% of the metro’s inventory; no additions since Q3 2010
Retail Market Overview REIS/Moody’s Analytics data defines five distinct geographic submarkets for the Raleigh-Durham market. The study area is located along the northern border of the North Raleigh submarket.
Asking Rents The Q3 2020 rents in the submarket increased 0.1% since August 2020 to an asking rent of $21.06 and an effective rent of $16.00, while the metro asking rent was $24.49. The 2020 rates are projected to settle down to an asking rent of $20.28 with an effective rent of $14.85.
Vacancy Rate The vacancy rate for both non-anchor and anchor properties was 7.9% as of Q3 2020, including a drop of -40 bps. It is expected that the vacancy rate will land at 11% by the end of 2022.
• Growth is flat while the metro grows at an annualized rate of 1.6%
Inventory
Annual Absorption
The North Raleigh submarket has 10.1 million SF of neighborhood and community shopping center space. This represents 32.9% of the metro’s inventory. There are 4.4 million SF of non-anchor properties spread across 84 buildings and 5.7 million SF of anchor properties across 73 buildings.
The non-anchor and anchor absorption over the 12 months since Q3 2019 for non- anchor properties was 50,000 SF, which was 62.8% lower than the average annual rate of 134,500 SF since Q3 2010. By contrast, the metro has averaged 314,000 SF over the same period. While 25,000 Sf of space is expected to be delivered by the end of 2020, the net absorption for the submarket will be negative 152,000 SF.
• Rent: $21.06 asking (up 0.1% since August), $16 effective rent. The metro average office asking rent is $24,49 • Vacancy Rate: 17.6%, change of -60bps; 3% lower than long-term average, and 2.7% higher than the metro • Absorption: 2,000 sf in 12 months, 8,400 sf since Q3 2010; the metro averaged 606,800 since Q3 2010
Market Conclusions
There is not a current demand to build more office space in the US-1/Capitol Boulevard Corridor submarket.
FIGURE: 4.B.6
Study Area
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North Raleigh Retail Submarket Credit: REIS/Moody’s Analytics and RKG Associates, Inc. 2020
Chapter 4: Appendix
Northeast Community Plan
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