TABLE: 4.B.2
Wake Forest Development Activity, Northeastern Section of Town (2020-2025 and Beyond) By Year and LandUse Type LandUse Type Under Construction, Planned, or Proposed 2020 2021
2022 2023 2024 2025+ Total
North Wake County Submarket Summary • 4.1M square feet in 132 buildings and s 24.7% of the Raleigh-Durham metro area. • Added 12,000 square feet since Q3 2010; the metro rate was 0.4%. • Rent: $10.30 asking in August, $9.38 effective, 1.9% change, -9.4% CRD. 2-year lease term, 2.8 months free rent, $1.85 expenses; the metro asking rent in August was $11.40. • Rents rose 1.2% from $10.18 over the 12 months from Q3 2019/ • Vacancy: 7.2%, -220 bps; 4.3 percentage points lower than the long-term and 1.3 percentage points lower than the metro. • Absorption: the metro annual rate has been 122,100 sf since Q3 2010; the submarket has seen 28,800 in the same period
Asking Rent
Residential - Multi-Family
-
-
-
-
182
84
266
The asking rent for August 2020 was $1030, in contrast to $11.40 for the metro. All told, there were three out of six submarkets with higher rents. The effective rent was $9.39, a change of 1.9%, with a Contract Rent Discount of -9.4%. Market dynamics will result in declines in asking rents to $9.74, with effective rents of $8.68.
Residential - Single-Family and Condo
496
14
69
123
97
2,277
3,076
Hospitality (Hotel Rooms)
-
-
-
-
-
-
-
Office
-
-
33,903
-
-
-
33,903
Institutional
-
-
-
-
-
94,137
94,137
Retail
-
-
3,403
-
-
-
3,403
Total Building SF (Office, Institutional, Retail)
-
-
37,306
-
-
94,137
131,443
Credit: Town of Wake Forest and RKG Associates, Inc. 2021
Market Conclusions
DEVELOPMENT PIPELINE The Town of Wake Forest is experiencing an active development market. The Town’s growing population, higher incomes and active development environment are producing a pipeline of future development. By contrast, the Northeast study area has seen less development interest, but there is some new residential development taking place in the community However, there has been a growing development momentum over the past decade that is projected to continue reshaping the northeastern section of Wake Forest – the area east of US Route 1 and north of the North Carolina Highway 98 Bypass. As this activity accelerates, it is expected that there could be increased development pressures that impact the Northeast Community study area. One of the most significant residential development near the Northeast Community is the multi-phased Traditions at Wake Forest subdivision (Traditions) which includes a diverse selection of higher value homes, an active senior community, and even a high-performing charter school. Traditions has already delivered hundreds of single-family detached and attached homes over the past decade. Further, Traditions and other development projects are set to deliver thousands of additional residential units over the next decade and beyond. As shown
in Table 4.B.2, the current development pipeline includes over 3,000 new single- family homes and 266 multi-family units. It should be noted that nearly 2,361 (71%) of these units are projected to be built after 2025, which is difficult to estimate, given changes in the real estate markets. Aside from the proposed residential development, the development pipeline in this part of Town does not project much new commercial square footage, approximately 131,443 SF with much of it proposed after 2025 Among the proposed real estate development projects in the pipeline that could be delivered within the next decade and exert some market influence on the Northeast study area, there are several projects worth mentioning. • Traditions Southwest (Phases I & II) – 275 residential units (recently completed) • Averette Road Subdivision – Includes up to 965 units (677 single-family detached and 288 single-family attached) on 272 acres • Kinsley Subdivision – 764 residential units on 203 acres • Thales Academy – 94,137 square foot facility for elementary and high school education.
The Flex category in this submarket is a major player for the metro. However, it is currently built out. If a product is conceived that meets a specific target need, there is existing institutional knowledge in the submarket to effectively deliver the product. REIS’ new construction analysts report that no more competitive Flex/R&D stock will be introduced to the submarket this year, and net total absorption will be negative 95,000 square feet. Consequently, the vacancy rate will drift upward by 2.4 percentage points to 9.6%. During 2021 and 2022, developers are expected to deliver a total of 15,000 square feet of Flex/R&D space to the submarket amounting to 20.3% of the new construction introduced to Raleigh-Durham. Industrial employment growth at the metro level during 2021 and 2022 is anticipated to average 1.9% annually, enough to facilitate an absorption rate averaging 20,000 square feet per year. The North Wake County submarket has no forecasted absorption for 2021 and 2022. The submarket vacancy rate will finish 2021 at 10.3% and will decline 0.4 percentage points to 9.9% by year end 2022. Between now and year-end 2020 asking rents are expected to decline -5.4% to a level of $9.74, while effective rents will fall by -7.5% to $8.68.” – REIS/Moody’s Analytics.
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Chapter 4: Appendix
Northeast Community Plan
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